Monday, Apr 18, 2005
Monday, Apr 18, 2005 |
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Advts: Classifieds | Employment | New Delhi
Staff Reporter
NEW DELHI: : The off-again-on-again fiddling with the newly introduced Value Added Tax (VAT) rates in the Capital and the rollback announced this past week on certain commodities is turning out to be something of an embarrassment for the Delhi Government. Not only does it indicate that a whole lot of lobbies are at work pressurising the Government, it also signals lack of proper planning and bad execution and an unsure transition to the new tax regime. What is even more surprising is the confession by the authorities that there have been discrepancies in categorising various commodities and remedial measures are being taken. Interestingly, the rollback by the Government has given credence to the Opposition propaganda that VAT had resulted in price rise when actually the supply line of a vast majority of products was withheld by manufacturers for some reason or the other. For instance, the Government for the second time in one year went ahead with an increase in the rate of tax on diesel from 12 per cent to 20 per cent only to roll it back under pressure. Now the Finance Minister, A. K. Walia, states that even bullion was suffering a loss and the Government intends to revert to the 0.50 per cent tax on the commodity instead of 1 per cent. Experts find it strange that while attempting to implement VAT in the Capital, no homework was done by the authorities to assess the impact re-categorisation of various commodities would have on the price line. Similarly in the case of diesel, the farming community in the Capital is minuscule and a majority of the consumers are commercial in nature. Any increase in duty or drop in consumption would not have had any impact on the revenue and things would have returned back to normal after some time. "The Government has clearly fallen into the trap laid down by the Opposition and the traders. Its reaction is nothing short of panic and no effort has been made to assess the situation before going in for such drastic changes in the VAT structure that could have long term ramifications,'' a senior official remarked. Surprisingly, even the Chief Minister, Sheila Dikshit, has fallen for the "misleading campaign'' by certain traders and various lobbies and opted for populism instead of good governance. "It should be noted that no political representative in the Capital spoke for the common man or the middle class. Some Member of Parliament was leading a delegation of steel manufacturers or readymade garments traders. Someone else wanted relief on industrial inputs and some on dry fruits. There was nobody pleading that the prices of essential commodities, including kirana items should be brought down.
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