The nation-wide bandh by traders to oppose introduction of the value added tax VAT) system entered the second day on Tuesday even as the implementation of the new tax regime was deferred.
Graphical representation of value added tax and how it works.
The crucial meeting of the empowered committee of state finance ministers on value-added tax began in New Delhi on Wednesday to resolve all pending issues to ensure smooth implementation of the new tax regime from June 1 this year.
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Observing that the prime reason for these losses was high fuel cost which constituted almost 40-50 per cent of an airline's total costs, Civil Aviation Minister Ajit Singh said the aviation turbine fuel (ATF) prices were high due to rising base price and "very high VAT imposed by state governments."
\nThe traders had earlier decided to go on a strike from October 2, to protest the implementation of VAT on essential foodgrain.
About 410 petrol pumps in the national capital were to shut shop on Friday to protest against the hike in the VAT rate on diesel, which was driving vehicles to neighbouring Gurgaon for refueling.
The meeting of the Empowered Committee of Finance Ministers of States and Union Territories began with some states demanding that they be allowed to charge service tax on certain items pending a decision on the implementation of VAT.
NITIE, Mumbai, invites students and working professionals for Samiksh, a panel discussion on VAT: Implications On India Inc.
The contentious issue of value added tax was resolved on Tuesday with the state finance ministers deciding to implement from June 1 the new tax system in place of the sales tax.
Empowered committee of state finance ministers on value-added tax has sought to allay fears of traders that the new tax system will lead to increase in prices, stating that the worldwide experience did not support this apprehension.
After the Centre, the states have joined the fight against inflation. Later this month, they will discuss a proposal to exempt rice, wheat and pulses from value added tax.
In a major step towards tax reforms, the Centre on Tuesday agreed on a 3-tier system of compensating the states that incur revenue loss on account of implementing the value-added tax from April 2005.
The decision to decrease VAT on diesel from 20 per cent to 12.5 per cent was taken at a cabinet meeting today presided over by Chief Minister Sheila Dikshit.
The much-awaited introduction of value added tax regime from April one this year will be delayed by a few days because of some "unavoidable procedural tangles".
The state government of Kerala will introduce 'Lucky VAT' - a novel lottery scheme to improve sales tax collections from August 29.
There is startling accuracy to Dibakar Banerjee's portrayal, notes Sukanya Verma.
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