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U.P. to join VAT club on January 1

LUCKNOW: Uttar Pradesh will join the VAT club this coming New Year’s Day. This follows the Ordinance issued by the Governor, T. V. Rajeswar, on Thursday, a day after getting the go-ahead from President Pratibha Patil. The notification for implementing the new tax regime from January 1 was subsequently issued by the State Government.

According to the Government notification, the commodities have been divided into four categories some of which have been freed from VAT while others like gold and silver will attract one per cent tax. Over 150 commodities have been exempted from VAT. Most of the taxable items have been kept within the four per cent tax limit.

The items which have been kept out of the tax net include equipment used in farming, Banarasi saris, butter milk, bread, khadi, firewood, chikan products and blood and blood plasma.

One per cent tax will be levied on gold, silver, gems and bullion.

However, it is the commodities largely used by the common man which will become costlier from January 1 as 4 per cent tax has been proposed for several items of daily use. These include rice, wheat, paddy, pulses, jaggery, honey, matchboxes, tea, oilseeds, sweets, khandsari, hosiery goods and knitting wool. Four per cent tax will also be levied on audio, video cassettes, IT products, electronic products, TV , radio, cell phone and its parts, DVDs, CDs and industrial products like zinc, tin, uranium, liquid glucose and nepthalene.

While sugar, wheat flour, maida, textiles and scientific equipments will become costlier, milk products like “khoya”and “paneer”, milk powder, spices, edible oils, kerosene oil, sewing machines, chemical fertilisers, water pumps and tractors will become cheaper after the new tax regime is enforced.

A significant feature of the new measure is that tax evasion by traders, wholesalers and retailers would become virtually impossible as the trade tax authorities have been empowered to seal the commercial establishments and even conduct raids on the residential premises of the tax evaders.

In a bid to infuse corporate culture, the Trade Tax Department has been renamed Commercial Tax Department and the trade tax officers will be known as commercial tax officers. Registration has been made mandatory. Running a business without registration would entail a fine of Rs.100 per day.

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U.P. to join VAT club on January 1

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