Introduction of VAT enhances revenue generation

Kolkata, Mar 9 (UNI) The gradual introduction of Value Added Tax (VAT) regime at the state-level has enhanced the consolidated revenue generation programme of the Union government to a great extent.

This view was unanimously expressed here today by a panel of financial experts and revenue consultants at a national-level seminar, organised by the Confederation of Indian Industry(CII) Eastern Regional Council.

Intiating a debate on the usefulnerss of VAT in place of the previous Central Sales Tax(CST) regime, National Institute of Public Finance and Policy Director G Rao, also a member of the Prime Minister's Economic Advisory Council, claimed that in spite of some teething problems at the intitial stages, the introduction of VAT as a single mode of sales tax nationwide, had now become a resounding success in almost all the states.

As a result of VAT, with only two-tier of tax slabs, had increased the revenue collection in almost all the state manifold by about 25 per cent during the past two years, besides generating substantial income in the Central coffer on year to year basis", Dr Rao emphasised.

Expressing similar views Chief Commissioner of Central Taxes A S R Nair described the successful introduction of VAT as one of the most radical reforms introduced in the Indian Economy so far, and said it had helped to a great extent in revitalising the market economy.

Quoting latest government figures in terms of the healthy growth in tax collection both at the state and the national level, state Sales Tax Commissioner H K Dwivedi gave the credit to the introduction of the new VAT regime.

In this connection, he thanked West Bengal Finance Minister Asim Dasgupta for his yeomen's service in bringing in the new regime as the Chairman of the national-level VAT Implementation Committee.

Among others noted tax consultant K Vaitheeswaran addressed the seminar. Though he was in favour of the views expressed by others in terms of positive growth in the national revenue generation project following the introduction of VAT, he also expressed concern regarding the structures of VAT vis-a-vis CST as it called for maintaininig separate records and transactions for both inter-state and intra-state sales procedings thereby complicating the process to a great extent.

Under the circumstances, Mr Vaitheeswaran suggested further rationalisation of the supply chain logistics and the Service tax.

UNI