Twenty one states which have switched over to Value-Added Tax on Tuesday agreed to adopt uniform rates for industrial input, capital goods and essential commodities like medicines, salt, bread and PDS items.
A day after empowered committee of state finance ministers expressed its determination to implement VAT from April1, traders on Tuesday said they will "gherao" Parliament on Wednesday in protest against the new "inflationary" tax system.
The empowered committee on value added tax will meet on Saturday to take up the issues arising after three months of implementation of the new tax system by 21 states, including compensation formula for any losses incurred by states due to VAT.
Coinciding with the 3-day traders stir against the implementation of value added tax, the Mid-term Appraisal of the 10th plan has pointed to "serious design flaws" in the tax even as Planning Commission Deputy Chairman Montek Singh
The states have been dismissive of the Centre's suggestion to cut taxes and advance the date of implementation of value added tax regime for medicines
Around twenty-five thousand retail mobile traders from across Maharashtra downed their shutters today in protest against the imposition of higher VAT at 12.5 per cent on sales of mobile handsets.
The Twelfth Finance Commission chairman C Rangarajan said on Tuesday that he was in favour of an early implementation of the value added tax regime.
The Planning Commission has favoured the early introduction of nationwide value-added tax regime to augment revenues of the states and further restructuring of their costly debt to reduce their interest burden.
If eight states could join the VAT system much after the rollout date and after seeing how it works, why can't the same apply to states opposed to the farm laws, asks A K Bhattacharya.
In an apparent climb-down from its earlier stance, the Empowered Committee on value-added tax on Monday gave in to the Centre's plan for a nationwide VAT implementation.
An official panel on Tuesday ruled out any increase in value added tax (VAT) rates as part of a package to compensate states on account of revenue loss due to a one per cent cut in Central Sales Tax that was to have happened in the beginning of this fiscal.
One of India's leading industry bodies - the Associated Chambers of Commerce and Industry - on Friday urged the government to bring sugar, textiles and tobacco products under value added tax.
Acceding to the long-pending demands of traders in Uttar Pradesh, the state government is planning to simplify the present structure of value-added tax. The state government also announced exempting handmade carpets (silk and wool) from VAT. "We will also close about 50 check-posts in the state in phases in order to safeguard the traders' interest. Unclassified items will also be categorised," he added.
The GST Council on Saturday postponed a decision on cutting tax rate on life and health insurance premiums, officials said. The 55th meeting of the GST Council, chaired by Union Finance Minister Nirmala Sitharaman and comprising state counterparts, decided that some more technicalities needed to be ironed out and tasked the GoM for further deliberations.
The government on Monday said the tax revenue of VAT implementing states has shown an increase of 27.1 per cent during the first quarter of this fiscal year-on-year.
Delhi government on Wednesday exempted life-saving medicines from taxation under the value added tax regime and decided to approach the Empowered Committee of State Finance Ministers for reduction in sales tax on diesel.
The resistance to VAT in Uttar Pradesh has been declining after the tax's success in 21 states.
All textile items, currently exempted from value added tax, will attract 4 per cent VAT from the next fiscal, the empowered committee said on Thursday.
The panel on value added tax has decided that items which have at least 50 per cent industrial use will attract 4 per cent tax rate for that particular use.
