VAT panel not to introduce new rate for 3 months
VAT panel not to introduce new rate for 3 months
THE Empowered Committee of State Finance Ministers on value-added tax (VAT) does not favour, for now, the introduction of a new VAT rate between 4 and 12.5 per cent.
This position of the VAT panel has been conveyed to the Delhi Government, which had been pitching for an 8 per cent VAT rate.
“It was decided that at least for the next three months, the Empowered Committee would not consider introduction of any new rate,” Mr Ramesh Chandra, Member Secretary of the Empowered Committee, told Business Line.
Under the current VAT system, covering about 550 goods, there are only two basic VAT rates of 4 per cent and 12.5 per cent. There is also a specific category of tax-exempted goods and a special VAT rate of 1 per cent only for gold and silver ornaments.
Admitting that prices of certain items that had moved from, say, the earlier 8 per cent to the VAT rate of 12.5 per cent could go up, Mr Chandra said that the Empowered Committee hoped the effect of the additional 4.5 per cent would get largely mitigated through the “set off” that would be available under the new tax system.
More: thehindubusinessline.com