Other States - Uttar Pradesh   

VAT comes into force in U.P. amid protests

LUCKNOW: Uttar Pradesh joined the Value Added Tax (VAT) club on Tuesday amid protests by different traders’ organisations who downed shutters. The State bandh by traders, however, drew a mixed response.

Describing the implementation of VAT in Uttar Pradesh as a historic decision that would enable the State to join the economic mainstream of the country, Chief Minister, Mayawati said it would give a fillip to the development of trade and industry. The Chief Minister pointed out that not only will the essential commodities be available to the consumers at a fair price, the measure would benefit the traders and the consumers as the tax rates in U.P. would be similar to those prevalent in the other VAT States.

Addressing a Press conference to announce the introduction of the new tax regime, the Chief Minister attacked the previous Government which had refused to implement VAT as it played up to the demands of the vested interests. Ms. Mayawati said the State had paid a heavy price due to the non-implementation of VAT as it left an adverse impact on trade and industry. Moreover, it resulted in the flight of industries from U.P.

The Chief Minister assailed the Bharatiya Janata Party and the Congress for misleading the traders despite the fact that VAT had been implemented in the States ruled by these parties. She dubbed the dharna and bandh by traders as an irresponsible act.

Stating that the Government would address the problems of the traders, the Chief Minister said tax has been reduced on 91 commodities with only four per cent tax levied on milk products, drugs and tea. While ‘chikan’ products and Banarasi sarees have been exempted from VAT, by raising the registration limit to Rs. 5 lakh, relief has been given to small traders.

Constitution of a Settlement Commission and State Tax Board were the other features of the move to implement VAT.

Following the implementation of VAT, the Trade Tax Department has been renamed Commercial Tax Department. Commercial Tax was one of the highest revenue earners contributing 58 per cent to the State Exchequer. The Chief Minister added that to achieve 10 per cent growth rate in the 11th Five Year Plan, U.P. needed huge doses of investment and the new tax regime would augment the State’s resources.

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VAT comes into force in U.P. amid protests

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