The Hindu : New Delhi News : New VAT regime for Capital from April

Online edition of India's National Newspaper
Friday, Dec 24, 2004

New Delhi

New Delhi

New VAT regime for Capital from April

By Our Staff Reporter

NEW DELHI, DEC. 23. Giving its green signal for progressive taxation and joining the league of other States, the Delhi Assembly on Wednesday passed the Value Added Tax Bill amid a walk-out by the Bharatiya Janata Party legislators, clearing the decks for implementation of the new tax regime from April 1, 2005.

Moving the Bill, the Finance Minister, A. K. Walia informed, that after the introduction of VAT regime, the Delhi Sales Tax Act 1975, the Delhi Sales Tax on Works Contract Act, 1999, the Delhi Sales Tax on Right to Use Goods Act 2002 and the Delhi Tax on Entry of Motor Vehicles into Local Areas Act, 1994 would stand repealed. The Minister said provisions of the Delhi VAT Act were forward looking and provided for self-assessment by traders. The Bill also provides for the time limit for disposal beyond which the matter is automatically decided in favour of the dealers.

Intervening in the discussion, the Chief Minister informed the BJP members that the Government had undertaken discussions with various trade associations and chambers during the last few months and had even circulated a draft of the Bill for getting a feedback. If there are any other amendments to be made during the implementation of the Act then the Government is open to that kind of situation, she asserted. However, the BJP remained unconvinced by Ms. Dikshit's assertions and the arguments put forward by Dr. Walia and walked out in protest.

Highlighting the plus points of the Bill, Dr. Walia said VAT had been necessitated by the need to modernise tax administration and re-design tax policy in view of the increasing globalisation of the economy. Further, the ill effects of tax cascading erode competitiveness and this was a matter of nation-wide concern. The VAT system is considered the best available option and tax is to be collected at very point of transaction. The VAT system is fair, simple and has in-built features that improve compliance.

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