The Hindu : New Delhi News : `VAT may add to confusion'

Online edition of India's National Newspaper
Monday, Dec 20, 2004

New Delhi

New Delhi

`VAT may add to confusion'

By Our Staff Reporter

NEW DELHI, DEC. 19. With the Delhi Assembly set to take up the new Value Added Tax (VAT) Bill for consideration leading to its legislative approval, the All India Tax Advocates Forum has expressed its serious reservations against the move on the ground that the proposed law is not only going to destroy the distributive character of the metropolis but lead to added woes of the 1.70 lakh traders already hard-pressed by the Sales Tax Department's performance.

The Forum president, M.K. Gandhi, said as against streamlining the tax collection regime, the VAT law was set to compound the confusion to the detriment of the trade and the consumers. The sales tax expert explained that the refundable tax arrears on inter-State trade and export incentives amounting to around Rs 3,800 crore may not be handled efficiently by the Sales Tax authorities given their past track record. As such, several new provisions in the proposed law on this count would adversely impact the traders, majority of them being either illiterate or semi-literate. Charging the Delhi Government with rushing the VAT Bill into the Assembly in unnecessary haste, the Forum president called upon the city MLAs to rise above party affiliations to oppose the proposed law in its present form. "Imposition of hiked tax at the rate of 12.5 per cent on the unlisted goods is bound to shoot up prices and hit the common man hard amid the ongoing spiral of country-wide inflation,'' he opined.

Another sore aspect of the proposed law, he said, pertains to empowering the Sales Tax Commissioner, with draconian powers. "As forum of last appeal, the Commissioner is feared to ride rough shod over the genuine grievances of the traders who are now bound to hire Chartered Accountants to certify their trade turn over,'' he said, adding that this will add to avoidable liability on the traders.

Threatening direct action in tandem with several trader organisations against the anti-trade moves of the city government, the Forum president suggested that the Government may enter into parleys with various stake-holders including consumer organisations to fine-tune the Bill in tune with the ground realities of the Capital's economy that is primarily dependent upon sales tax collections. He also volunteered to chip in with the help of Forum's professionals to engage the traders and the Government into a highly desirable interface over the contentious VAT law.

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