VALUE ADDED TAX (VAT)
States demand entire proceeds from VAT on imports :
States have demanded imposition of VAT on imports, with 100% of the proceeds earmarked for them. In Budget 2006-07, the Central Government had imposed a countervailing duty (CVD) on all imports to compensate for the state- level taxes. Full credit of the CVD levied at a rate of 40% is allowed to
manufacturers of exci sable goods. The proceeds from the CVD go to the divisible pool and are shared between the center and states as per the 12th Finance Commission formula, under which states get 30.5%.
VAT Revenue Growth :
Dr. Dasgupta, Chairman of the Empowered Committee of State Finance Ministers said that the tax revenues of all VAT implementing states taken together grew by about 14%, even while it exceeded
20% in some states,during 2005-06.
Non - VAT States Hold Key to CST Phaseout :
Chidambaram said the introduction of VAT system, to replace sales tax, resulted in 13.8 percent increase in revenue for the states implementing it during 2005-06. The minister said the phase out of Central Sales Tax (CST) will depend on quick adoption of VAT model by Tamil Nadu, Uttar Pradesh
and Pondicherry.
VAT panel asks States to list out deviations in rates :
The VAT Panel has asked the states to come up with an “authoritative list” spelling out the deviations in the VAT rates adopted by them as compared to those decided by the empowered committee of
State Finance Ministers.
STATES’ INTEREST IN DEMAT OF FORM C
Administration of inter-state trade may get more streamlined with a number of States now keen to adopt a dematerialised system for the 'C Forms' that are issued to track inter-state trade transactions.
'C Form' or some other mechanism was necessary for tracking inter-State transactions even if Central Sales Tax were to be abolished.
States have demanded imposition of VAT on imports, with 100% of the proceeds earmarked for them. In Budget 2006-07, the Central Government had imposed a countervailing duty (CVD) on all imports to compensate for the state- level taxes. Full credit of the CVD levied at a rate of 40% is allowed to
manufacturers of exci sable goods. The proceeds from the CVD go to the divisible pool and are shared between the center and states as per the 12th Finance Commission formula, under which states get 30.5%.
VAT Revenue Growth :
Dr. Dasgupta, Chairman of the Empowered Committee of State Finance Ministers said that the tax revenues of all VAT implementing states taken together grew by about 14%, even while it exceeded
20% in some states,during 2005-06.
Non - VAT States Hold Key to CST Phaseout :
Chidambaram said the introduction of VAT system, to replace sales tax, resulted in 13.8 percent increase in revenue for the states implementing it during 2005-06. The minister said the phase out of Central Sales Tax (CST) will depend on quick adoption of VAT model by Tamil Nadu, Uttar Pradesh
and Pondicherry.
VAT panel asks States to list out deviations in rates :
The VAT Panel has asked the states to come up with an “authoritative list” spelling out the deviations in the VAT rates adopted by them as compared to those decided by the empowered committee of
State Finance Ministers.
STATES’ INTEREST IN DEMAT OF FORM C
Administration of inter-state trade may get more streamlined with a number of States now keen to adopt a dematerialised system for the 'C Forms' that are issued to track inter-state trade transactions.
'C Form' or some other mechanism was necessary for tracking inter-State transactions even if Central Sales Tax were to be abolished.
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