The Hindu : Other States / West Bengal News : Introduction of VAT `unconstitutional'

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Sunday, Jan 16, 2005

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Introduction of VAT `unconstitutional'

By Our Special Correspondent

KOLKATA, JAN. 15. The introduction of Value-Added Tax (VAT) in place of the existing sales tax will be "unconstitutional," according to the former West Bengal Finance Minister, Ashok Mitra.

"There should be no haste in introducing VAT," Mr. Mitra said at a press conference here on Friday. Asserting that neither the State Government nor the Centre "has the right to withdraw sales tax," which had full constitutional sanction, he said: "The right to impose sales tax has been granted to the States under Article 246 of the Constitution and the move to replace the tax was "illegal and unconstitutional."

The State's move to draft a bill on VAT which would repeal the sales tax clauses would be "highly irregular and a roundabout way of introducing things bypassing the Constitution."

`Absurd, impractical'

Mr. Mitra, who was the chief economic adviser to the Centre during the time of Indira Gandhi, said that a commission should be set up to go into the merits and demerits of sales tax and ascertain whether it had outlived its utility in today's economic scenario.

The proposed tax was not only "absurd and impractical" but also went against the spirit of federalism, the bedrock of the Constitution.

He said he had discussed his position on VAT with CPI(M) leaders. "I have not heard a Left party leader airing any positive sentiment about the new tax structure."

Anil Biswas, CPI(M) State secretary and Polit Bureau member, however, said that VAT's introduction was final. But the party would study Mr. Mitra's views on the subject.

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Introduction of VAT `unconstitutional'