Posts Tagged ‘Central’
Vat and the Central Taxes in Mumbai, India
February 21st, 2010
1. INTRODUCTION:
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1.1Â Â Â Â Â Â Â Â Â Â VAT Council of States, the body of State Finance Ministers and Standing Council of Commissioners have agreed that the VAT should be implemented all over India from 1-4-2001. However, subsequently, after taking into consideration the fact that the groundwork is still in progress, the date has been extended to 1-4-2002. One thing is certain that the word âVATâ [Value Added Tax] is a symbol of Globalisation and Liberalisation, which is a universal phenomenon for the current age is bond to be implemented in India.
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2.SUCCESSFUL TAX SYSTEM:
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2.1Â Â Â Â Â Â Â Â Â Â Among many other things, the successful tax system always tries to avoid cascading effect of the tax. The VAT, being Value Added Tax, it presupposes that, if the tax is levied on sale value, all the taxes paid while making purchases as well as all the taxes paid during the process of manufacture or import are to be refunded. The CREDIT method or INVOICE method of VAT system ensures that the taxes shown in the purchase bills are given the credit to the dealers. The uncontrolled incidence of tax always shrinks the industry and trade and keeps away from the developing process of the national economy. The tax system has to be neutral so far as its effect on the choice of inputs and outputs for the manufacturer and choice of the goods for a consumer is concerned.
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