Date:14/03/2005 URL: http://www.thehindubusinessline.com/2005/03/14/stories/2005031401171300.htm

Back `VAT may turn redundant soon'

Our Bureau

Hyderabad , March 13

THE present Value Added Tax (VAT) is not uniform either in law or in tax rates. Each State is also going its own way, observed Mr Nitin K. Parekh, Co-Chairman of Assocham's Expert Committee on Indirect Tax.

Competitiveness of the industry is left on the back burner and only revenue is the mantra. This was not what was originally envisaged when the VAT was first proposed by the apex chambers in the country, he told Business Line.

The intent behind VAT, which is being planned, discussed and directed for nearly 10 years now, as seen by the Chambers was to make Indian businesses competitive in the era of globalisation, Mr Parekh, who is also

Chairman, Trade & Commerce Committee of the Federation of Andhra Pradesh Chambers of Commerce and Industry (FAPCCI) said.

Mr Parekh said, "Speed is the way businesses are run and VAT will become redundant within couple of years; as we have wasted time and money in formulating it."

In this background, "I think the Goods and Services Act (GST), as recommended by the Kelkar Committee would be a better alternative. In suggesting GST, my idea is to leap-frog into the future." The Indian industry and business can ill-afford changes in the taxation within the next two to three years.