Trade body slams govt on VAT

The Confederation of all India Traders today said the Centre and states had failed honouring commitments made in the white paper on value-added tax. It proposed setting up of a special working group to remove VAT disparities that have emerged in states.

"States have not honoured the commitments made to the empowered committee and this has resulted in different states setting different rates for the same item," Praveen Khandelwal, secretary-general, CAIT, said, leading to loss of business for traders," Praveen Khandelwal, secretary-general, CAIT, said while releasing a note on "Nine months of the VAT".

For example, one per cent VAT was decided for gold but Rajasthan went ahead with 0.25 per cent and Uttar Pradesh with 0.15 per cent. Delhi has recently changed its rate from one per cent to 0.1 per cent. In hardware, Delhi has a 4 per cent rate but Punjab has 12.5 per cent.

"The government has not made a firm commitment on phasing out central sales tax yet," Khandelwal said.

He criticised the government for its failure to bring dealers within the VAT network. "Only 1,72,000 dealers are registered in Delhi while the number of dealers is actually much more," Khandelwal said.

The revenue department is charging dealers with a fine of Rs 10,000 even if there is any error in VAT returns. This only needed rectification and did not call for a fine, he said.