Bengal CPI(M) Clarifies Rationale Of VAT
THE Bengal unit of the CPI(M) has called upon the traders’ organisations to refrain from going in for a strike action on the implementation of Value Added Tax or VAT. In a statement issued from the Muzaffar Ahmad Bhavan in Kolkata, Anil Biswas, state secretary of the Bengal CPI(M) has clarified the rationale behind the VAT.
In the earlier tax regime, an entrepreneur had to pay taxes on purchase of raw materials and production implements. There was a fresh round of taxes imposed on the finished product itself.
VAT means that the entrepreneur shall now have to pay taxes in a much more simplified manner and once VAT is set in place, the taxation at the level of the raw materials will be dropped. Traders will benefit well from VAT.
The traders will themselves decide the amount of VAT to be paid based on a very simplified form. The balance emerging out of how much the trader had paid as taxes, and how much he/she has gained by way of taxes when selling their wares, is the VAT.
The trader has merely to work the amount out and deposit it with the concerned department with a filled-in form. The trader will be required to carry a record of their cash memos. No additional books of accounts will have to be maintained over and above those already being maintained.
In general, small traders have been excluded from the VAT. Those who have annual sales figures less than Rs 5 lakh would come within the purview of the VAT. For those having sales figures of between Rs 5 and 50 lakh, the VAT will be fixed at 0.25 per cent of the total sales.
Implementation of VAT will see taxes of essential articles become zero or be drastically reduced. For all food articles including rice, lentils, semolina, flour, raw vegetables, fish, meat, salt, sugar, bread, seeds sweetmeats etc, there would be no VAT applicable.
Clothing like dhotis, and saris will not be included in the VAT regime. The tax on tea will come down to four percent from eight. The same reduction is in operation for medicines and drugs as well as paper. Tax incidence will reduce for soap, cooking gas, cement, and fertiliser.
In a VAT regime, taxation across states will have a rational basis of uniformity in general. The points of discrepancies will be smoothed over through meetings of the committee of state finance ministers. The committee will also work for the implementation of VAT in eight states that have not yet executed it.
The VAT will certainly militate against tax evasion and the funds that will be additionally generated from collection of taxes will be used for developmental purposes. Anil Biswas clarified to say that neither the union government nor any other agency “has imposed VAT on the states, and the decision to implement VAT follows the resolution to this effect taken at the chief ministers’ conference held in 1999.”
More: pd.cpim.org
4/21/2005
Ten day long VAT protest starts in Kolkata
Ten day long VAT protest starts in Kolkata
Wholesale trading activities in West Bengal came to a halt today, which will continue for ten days to mark protest against the implementation of VAT.
The wholesale markets at Posta, Belgachhia, Rajakatra, Armenian Street and Bagri Market will remain closed during this period. This strike will culminate with an all-India Trade Bandh on April 29th - when even the retail shops will down shutters.
The worst hit are the daily labourers like the handcart pullers who reach goods from one place to the other in the city. The ten day strike means that they have no wages for that many days. They say it will be impossible for them to take care of their families for such a long period without any earnings. They want the govt. to intervene in the matter.
“It is very difficult for us. We are facing many problems. How will we earn and take care of our families? The government should do something about the whole issue”, said Mahendra Sau, Handcart Puller.
Announcing the wholesale traders’ decision which will cripple the supply of essential commodities to the consumers, Federation of West Bengal Trade Association Publicity Chairman Mahesh Singhania said that small traders and vegetable and meat sellers had been kept out of the purview of the nationwide strike keeping in view the overall public interest.
“The strike we had called today is for ten days for wholesale dealers who do not make any retail sales, they will be under this strike. We have been trying to make collective pressure on the state Finance Minister and other Finance Minister so that what they had assured us, uniform rate of tax…. traders and consumers friendly Act. Many things have been simplified but yet the proposed law is not at all traders or consumer friendly. So the whole idea is to create pressure on government to consider our issues”, said Mahesh Singhania.
More: 123bharath.com
VAT to jeopardise tax revenue of states
VAT to jeopardise tax revenue of states
Rashtriya Lok Dal chief Ajit Singh today said the implementation of the VAT regime would lead to a decline in the tax earnings of states.
Singh told newspersons here that the new tax regime would result in the centralisation of the tax system, consequently causing significant damage to the tax revenue of states.
Though the Centre had assured to compensate the states on the loss arising from VAT, it would not be easy on its part to identify the revenue loss.
Quoting a recent survey, Singh said the sales tax collections in West Bengal had been reduced by half due to the introduction of the VAT system. The implementation of similar tax systems in other developing countries too had not given the desired results, he added.
More: sify.com
4/20/2005
Bengal to watch post-VAT prices
Bengal to watch post-VAT prices
PMC would suggest realignment of tax rates for a specific commodity is its prices went up under VAT.
“If PMC finds a large increase in price of a certain commodity, it will ask the government to reconsider the tax rate on the product. The government in all probability would reconsider and reduce the tax rate on the commodity to stabilise prices,” C M Bachhawat, commissioner of commercial taxes of West Bengal government, announced here today.
Bachhawat was addressing a seminar on VAT organised by the Merchants Chamber of Commerce (MCC).
The PMC would also monitor the prices of commodities is they crashed after the roll-out of VAT.
It would then report to the government on possible remedial action.
Bachhawat claimed today that prices of certain products like paper and cement had already come down as a result of VAT within 13 days of its imposition from April 1.
“Prices of cosmetics and some medicines have also witnessed declines,” he added.
Answering queries put forward by traders and manufacturers at MCC, Bachhawat said that the requirement of maintaining records for eight years was being reconsidered by the Bengal state government.
MCC would like it to be brought down to five years.
While explaining West Bengal’s stand on the exemption limit which has been fixed at Rs 5 lakh for traders, he said that the intention now was to evolve a formula.
Reacting to a suggestion for change of the definition of gross turnover for taxable items only, he said traders and manuf acturers could expect an announcement soon.
MCC suggested that the provision to allow adjustment of input-tax paid after incentive period for tax remitted goods should be reconsidered.
Bachhawat admitted that the government was likely to grant an exemption in this respect.
More: business-standard.com