Industry & Economy
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Taxation
More taxes to come under VAT net
K. R. Srivats
New Delhi
,
Dec. 16
CORPORATE India may have some cause for cheer. Compensatory entry taxes, turnover tax and special additional tax forked out by India Inc will be `VATable' in the proposed value-added tax (VAT) regime that will replace sales tax from April 1, 2005.
Informed sources, however, held that entry taxes (levied in lieu of octroi) and octroi charges would not be VATable — i.e. no input tax credit can be claimed on such levies. Further, taxes such as entertainment tax will also not be VATable in the proposed regime.
The Indian industry has been demanding that the proposed VAT regime should subsume all State taxes and local taxes, including levies of local bodies. Some of the industry associations have even suggested that there should be a stipulation to prohibit the States from imposing any further levy after the implementation of VAT.
Industry associations and trade bodies have also been contending that the 4 per cent Central sales tax (CST) has no place in the proposed VAT regime and it should be dispensed with. The Centre has, however, held that the 4 per cent CST would have to continue in the first year of VAT implementation (2005-06).
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