States may levy 4% VAT on imports
States are likely to be given the right to levy VAT on imports as part of the compensation package.
By Deepshikha Sikarwar, TNN |
NEW DELHI: India Inc doesn���t have to fret about any import duty cut in the Budget. Because states may soon impose a 4% value added tax (VAT) on imports. States may be allowed to levy VAT on imports as compensation for the phase-out of central sales tax (CST).
The Centre may bring a legislation in the monsoon session of Parliament to carry out suitable amendments in this regard, sources said. According to them, the Empowered Committee of Finance Ministers, which met on Tuesday, was of the view that the levy should be kept at the lower level of the slab and not at the higher level of 12%.
States are likely to be given the right to levy VAT on imports as part of the compensation package agreed between them and Centre for phasing out CST. The VAT on imports would be collected just as other state levies like stamp duties are collected at present. The duty could be collected by the customs functionaries themselves from the importer when he pays customs duty and then transferred to the state to which the goods are meant.
Internationally, most countries with a VAT regime levy the duty on imports as well. In India, however, imports are exempt
from VAT but domestic producers face both central excise duty as well as VAT which renders their products uncompetitive vis-a-vis imported ones.
deepshikha.sikarwar@timesgroup.com
The Centre may bring a legislation in the monsoon session of Parliament to carry out suitable amendments in this regard, sources said. According to them, the Empowered Committee of Finance Ministers, which met on Tuesday, was of the view that the levy should be kept at the lower level of the slab and not at the higher level of 12%.
States are likely to be given the right to levy VAT on imports as part of the compensation package agreed between them and Centre for phasing out CST. The VAT on imports would be collected just as other state levies like stamp duties are collected at present. The duty could be collected by the customs functionaries themselves from the importer when he pays customs duty and then transferred to the state to which the goods are meant.
Internationally, most countries with a VAT regime levy the duty on imports as well. In India, however, imports are exempt
from VAT but domestic producers face both central excise duty as well as VAT which renders their products uncompetitive vis-a-vis imported ones.
deepshikha.sikarwar@timesgroup.com
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