Can
implementation of tax make essential commodities cheap?
Yes, it can, certainly. Take the case of northern Indian
state of Uttar Pradesh.
Implementation of the Value Added Tax (VAT) has made as
many as 91 goods, including tea, edible oils,milk
products, match boxes and readymade garments cheaper in
Uttar Pradesh
VAT
has come into effect in the state from January 1.
According to Chief Minister Mayawati, VAT will play an
important role in the development of industry and commerce
in the state as it has reduced the tax rate on 91
commodities.
The tax applicable on kerosene oil distributed under the
public distribution has been reduced to 4% from 10%. Tax
on all milk products, medicines, bicycles and match boxes
have been reduced from 8% to 4%.
Traditional chikan clothes, Banarasi sarees as well as
clothes prepared from handloom have been totally exempted
from tax.
Pens, computers, computer stationary -the items use by
students have also been provided a tax exemption. Bangles,
vermilion (sindoor) and bindi have also been made
tax-free. The tax applicable on sewing machine has been
reduced to 4% from 10%.
Source
: Commodity Online -
Kochi, Kerala, India, dated 03/01/2008
