December 2, 2008

VAT is against both, buyers and sellers: Rajiv Dikshit

DH News Service Gulbarga:
The Azadi Bachao Andolan has taken up a campaign towards creating awareness among the people against the VAT (value added tax) regime in the country. Speaking to the press here on Friday, Azadi Bachao Andolan national Convenor Rajiv Dikshit stated that the introduction of VAT was proving detrimental to the interests of traders, and consumers alike. Stating that the VAT regime had been brought in the country due to pressure from the World Trade Organisation (WTO), Mr Dikshit said, introduction of VAT was one of the 2,000 condationalities prescribed by WTO. However, he pointed out that of the 123 signatories to the WTO agreement, only 100 countries, including India, had introduced the VAT system.
And these 23 countries which had not introduced VAT were the developed countries, including the United States. “Since 1991, the US senate is still discussing whether or not to introduce VAT. US feels that its economy would collapse if VAT was introduced,” he claimed. When this is the case, there was no reason for India to change to the VAT regime so fast, that too without considering the pros and con of the new system, he said. Moreover, Mr Dikshit stated that the VAT introduced in India was completely different from the VAT introduced in other countries. While there was uniform rate of tax in other VAT countries, it was multi-rate in India. However, he said, the tax rate under VAT in India varied from four per cent to 34 per cent, and nearly 550 items had been brought under it. While there were 175 items that were to be taxed four per cent, nearly 200 items attracted 12.5 per cent tax, and 28 items including the petroleum by-products attracted 34 per cent tax. The rest attracted 20 per cent tax, he added. “However, the petroleum by-products had not yet been brought under VAT, but would be brought from January 2006,” he said. Also, Mr Dikshit said, after the introduction of VAT, all the countries, except India, had abolished all types of taxes, including the indirect taxes. He said, there were still 14 indirect taxes being levied in India. “These should be abolished,” he added. He said, the tax rate should be made uniform throughout the county, and moreover the tax rate should be reduced drastically. The VAT commissioner had been given punitive powers, which allowed the commissioner to harass the trades.

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