CAIT demand review of VAT system

New Delhi, June 11 (UNI) Traders in the national capital today strongly resented continued wide disparities and anomalies in the Value Added Tax (VAT) laws of different states which had jeopardised the trading activities in the country.

In a statement here, the Confederation of All India Traders (CAIT) alleged that though all the state Finance Ministers are members of the Empowered Committee, states left no stone unturned in flouting several important decisions, guidelines and directives of the Committee, which was the major cause of disparities and anomalies in VAT Acts and had even led to 'tax war' on certain commodities between states.

In a communication sent to Dr Asim Das Gupta, Chairman of the Empowered Committee, CAIT Secretary General Praveen Khandelwal, while demanding a 'total review of VAT system', lamented that the underlying idea of introducing VAT in India was to bring an end to 'tax war' and develop a harmonised taxation system throughout the country thus transforming India on to 'one mandi concept'.

Abolition of all other taxes except VAT and removal of trade barriers in inter-state trade was another commitment for introduction of VAT in India. Unfortunately, the present VAT Acts have totally failed in meeting above objective, Mr Khandelwal said.

The CAIT Secretary General said that the lethargic attitude adopted by the state governments on VAT had raised many eyebrows on the VAT system.

''Though claimed to be a transparent taxation system, the formula to determine the tax rate on any commodity is yet to be made public. So far, it is the sweet will of the state government to levy any rate of tax best suits to them.

''Steps to be taken to make VAT a uniform law throughout the country is yet to be decided. How Entry Forms or Road Permits in inter-state transactions will be eliminated is a million dollar question? These are some basic questions which need a clarification to make VAT system effective in the country,'' Mr Khandelwal said.

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