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The
regime of VAT would strictly impose from January 01, 2008
as per government official reports said. The Empowered
Committee had recommended it to impose it in all the
states by April 2005 to meet the implementation of Goods
and Service Tax (GST) on time that is planned to impose on
the entire state by 2010.
The
Central government is planning to impose GST tax system in
entire country by 2010 for developing India as a single
national market on the patterns of European Union to
reform a nationwide uniform tax structure on multitude
goods and services. For imposing this properly, the
central government has already set up an empowered
committee comprising Indian Finance Ministers of states to
make a blueprint of GST, central official reports
confirmed.
As
per GST rule, the states will get the authority to levy
and collect the tax on a wide range of services and
product including amusement parks, private health and
education services while the centre government will
collect GST on all India services like banking, insurance
and telecom sectors.
To
achieve this target Central Government has recommended all
the states to implement VAT rule from April 2005. Most of
the states except Tamil Nadu and Uttar Pradesh had imposed
this tax system within time limit but both these states
had denied imposing it. Later the DMK government in Tamil
Nadu had imposed this rule in 2007 but SP Government led
by Mulayam Singh Yadav in the UP had firm to not to impose
this rule in the state but now new government in state has
decided to implement this rule after getting Centre’s
directives.
The
state government will not get any loss reimbursement for
the first year’s loss as other states got because of
making delay in implementing this rule as per Empowered
Committee’s recommendation. According to its
recommendation, “All states that switch over to the VAT
regime by 2005 are entitle to total reimbursement of
initial losses by the central government in the first year
of implementation, 75 percent in the second year and 50
percent in the third year.” Uttar Pradesh may loss
nearby Rs.3,000 crores on the initial stage due to delay
to implement this rule, as per state’s top finance
department reported.
A
value-added tax (VAT) is a fee that is levied at each
stage of the process of producing goods and bringing them
to market against businesses by a government at various
points in the production of goods or services—usually
any time a product is resold or value is added to it.
France had adopted this system first time in the globe in
1954 and till now it is very famous tax system in more
than 40 countries in the globe including Canada and
European Nations.
Now
the manufacturers and the traders can be able to take
benefit of Input Tax Credit that was earlier absent in the
non-VAT regime. Uttar Pradesh is the last state to
implement VAT in the state.
The
Uttar Pradesh Vyapar Mandal (Traders Association) and
Transport operators have decided to call an undecided
state-wide protest from December 31 against government new
directives. According to Traders, “The new tax regime
will sternly hit the leather, food grain and garment
industries in the state as the rate of taxes in other
adjoining states is much less than what has been proposed
here.”
As
per transporters, they have decided to chakka Jaam from
January 01, 2008.
Source
: Newstrack India - Delhi, India, dated 31/12/2007
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