VAT to improve govt revenue: ICAI

By Staff
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Google Oneindia News

Chennai, Jan 10 (UNI) The Institute of Chartered Accounts of India (ICAI) today reiterated that implementation of Value Added Tax (VAT) would help in improving the tax revenue of the State Government.

Talking to UNI here today, ICAI president C A Manoharan said "VAT implementation will significantly improve tax compliance and will also help to increase revenue for the State Government, which can be utilised for development projects." Mr Manoharan said the VAT would also help the government to improve its assets as the fundamental concept behind VAT was to impose a tax at every stage of value-addition in the production and distribution chain.

The effect of VAT especially in the state tax department could be an increase in collections during the initial years due to the levy of both VAT and the existence of Central Sales Tax in a limited form, he said.

ICAI president further added that "medium-sized businesses can opt for VAT or a composition tax that does not pinch".

Most of the states have taken care to ensure that most essential commodities are either exempted or fall into the per cent slot where they are in the present dispensation, he said.

UNI

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