| The Confederation of Indian Industry (CII) today expressed disappointment over the decision by some of the states governments to defer the implementation of value added tax (VAT).
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| Commenting on the issue Sunil Kant Munjal, President, CII has said that the current introduction is of a state level VAT and therefore, this decision by some of the states would mean a setback to the indirect tax reform that the country badly needs.
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| CII President mentioned that in a globalised environment, the external sector of the economy was opening up fast - in keeping with international practices. "However, this is not being matched by concomitant internal reforms including tax reforms.
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| VAT is a must in order to ensure that there is synergy between external and internal reforms. VAT is also the first step towards the creation of a single Indian market, which in the long run is a must for India to become a competitive base for Industry," he said in a statement today.
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| According to CII, the decision would be particularly detrimental to the manufacturing industry and the overall economy since the current system of indirect tax works as a debilitating influence on the operations of the Indian manufacturing sector.
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| "Non-implementation of VAT at this stage would also mean that we are denying the country a transparent, progressive and rational tax system, said Munjal. |
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