Empowered Commitee meeting: CAIT calls for VAT system review

New Delhi, June 14 (UNI) Resenting continued wide disparities and anomalies in VAT laws of different states, the Confederation of All India Traders (CAIT) has strongly called for an overall review of VAT taxation system in the country.

While handing over a memorandum of demand to Empowered Committee Chairman Asim Das Gupta today, on eve of a crucial meeting of Empowered Committee of State Finance Ministers scheduled for tomorrow, a delegation of traders demanded restoration of yearly periodicity of C Forms used in inter-state trade and also advocated for levy of 0.25 per cent tax rate on composition scheme on VAT in all states.

Led by CAIT Secretary General Praveen Khandelwal, the traders' delegation strongly resented on the continued wide disparities and anomalies in VAT laws of different states, and said that it has jeopardised the trading activities in the Country.

''The traders across the country are also agitated over non-phasing out of Central Sales Tax (CST) in spite of firm commitment of Union Finance Minister and the Empowered Committee,'' said trade leaders.

Demanding a ''total review of VAT system'', the delegation lamented that the underlying idea of introducing VAT in India was to bring an end to ''tax war'' and to 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 objects, the traders observed.

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

''In last financial year, the periodicity of C Forms and other statutory forms used in inter-state transactions was reduced to quarterly instead of yearly. Since such forms are not available with the tax departments of different states in requisite quantity, the traders are suffering greatly and are becoming liable to pay difference of tax amount, interest and penalty which is highly unjustified and illogical.'' Asserting that phasing out of CST was a solemn assurance not only of the Empowered Committee but that of Union Finance Minister as well, the trader's delegation demanded that the Empowered Committee should make a categorical statement on the issue and declare a roadmap of phasing out of CST.

To make VAT a transparent taxation system, the delegation strongly advocated institution of ''VAT Lokpal'' in each state. It also advocated for formation of ''VAT Amendment Committee'' in each state on the pattern of one such committee already formed in West Bengal.

''On one hand the Union and state governments are talking about computerisation of tax system and lot of money is being spent in all states but websites of Empowered Committee and of different states carrying VAT laws are either not operative or not updated with the result that latest amendments etc are not made available to traders in time,''Mr Khandelwal said.

''It is also unfortunate that authentic VAT Acts and Rules of States are not available even after lapse of 14 months.'' UNI VJ DKS RS1755