VAT to end unhealthy competition: India, Inc.

NEW DELHI: Welcoming the White Paper on VAT, apex chambers of commerce and industry on Monday said this would mark the first step towards tax rationalisation, put an end to unhealthy competition among states and help integrate the domestic market.

Sunil Kant Munjal, president, CII, said a predictable VAT regime with a moderate rate of taxation will promote efficiency, competition and growth of a common market. “With the proposed implementation of VAT from April 1, ’05, the cascading effect of tax will hopefully come down, as also the prices of commodities,� he added.

A statement from Ficci pointed out that though VAT will end the multiplicity of taxes on turnover, surcharge, additional charge and special additional tax, this should be followed by abolition of all local taxes, including octroi and entry tax.

Assocham president Mahendra K Sanghi said VAT imposition will be 1% on bullion and 4% on foodgrains. He complimented finance minister P Chidambaram for bringing out a White Paper on VAT and exempting petrol, diesel, aviation fuel and liquor from its purview.