KASSIA president, Prakash N Raikar, brought VAT related issues, including a reduction in the rate of tax from the existing 14% to 2%, to forefront in order to enable local entrepreneurs compete with their counterparts in other states.

Citing the example of 0% VAT exemption for the ‘bread and bun’ category, Vijay Makal, chairman, sub-committee on commercial taxes, said chapatti is still charged under 14% VAT, like many other mass consumption items, including processed food, packaged drinking water, etc.

He urged the government to intervene in such situations, thereby reducing the tax rates from 14% to 4%, which would encourage all Medium and Small Enterprises (MSEs).

Source: Daily News & Analysis, India,  dated 19/01/2012