labels: industry - general, economy - general, governance
Traders point out confusion over VAT ratesnews
Our Economy Bureau
06 April 2005

New Delhi: At a two-day meeting of Traders Association in Delhi, businessmen said that uneven VAT rates will badly affect their trade. The 'white paper' on VAT prescribes just two VAT rates of 4 per cent and 12.5 per cent.

But under the VAT regime, states have been given the freedom to decide what rate of VAT is to be applied on each item. This is why some products are being taxed at the rate of 4 per cent in West Bengal and 12.5 per cent in Delhi.

"This distortion has led to no business environment in the country. Shops are open, but till date we do not have the Act and do not know what the bill books should look like," said a trader.

The traders' anger has also arisen from the fact that though 550 items are supposed to be covered by VAT, yet even almost a week after the VAT regime has begun, different states are yet to come up with lists of goods covered by VAT.

To date, the Delhi government has issued VAT details for 146 items, West Bengal for 273 items, Punjab for 317 and Maharashtra for 169 items.


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Traders point out confusion over VAT rates