Tepcon Banner

Home | About Jute | Jute Prices | Organisation | Directory | Technology | Statistics | Diversification | Jute Policy | Jute News | FAQ

Home>  Value added Tax VAT (Value Added Tax) 2011 (India) News


  Tax advocates urge Delhi govt not to hike VAT
  New Delhi, December 13, 2011 (PTI) The All India Tax Advocates Forum (AITAF) today asked the Delhi government not to propose any hike in VAT during the budget for next fiscal in view of the rising inflation and instead focus on realising tax dues amounting to over Rs 3,000 crore. "Delhi is in need of resource mobilisation to fund its manifold developmental activities. But, it will not be advisable to raise resources through further hike in VAT (value-added tax) rates in view of rising inflation, which is hitting the common man very hard," AITAF President M K Gandhi said in a statement. He said as the exercise for preparation of the Budget 2012-13 for the Delhi government gathers momentum, all efforts must be made to recover tax dues locked up in thousands of tax disputes cases rather than raising VAT. 
  Before VAT came into force in 2005, sales tax demand of nearly Rs 650 crore was locked up in as many as 3,249 cases, which are at various stages of appeals. Similarly, an amount of nearly Rs 2,400 crore is stuck due to nearly 14,800 objection cases pending before VAT authorities for disposal, the statement said. "The Delhi government targeted to raise revenues of over Rs 12,500 crore through VAT in 2011-12. Thus nearly 25 per cent of VAT revenues have been locked up due to pendency of disposal of appeal and objection cases. "Therefore, the government should focus on expeditious disposal of these pending VAT-related cases," Gandhi, who is also a leading tax consultant, said. 

  Ministry realises tourism potential of films

  New Delhi, December 7, 2011: The tourism ministry has rolled out the red carpet for filmmakers, particularly
from abroad - promising a bagful of concessions and logistics support, including swift visa facilities and custom clearance for film equipment - if India gets a prominent space in their movies.
  Ministry sources said tourism minister Subodh Kant Sahai went all out to woo filmmakers at the recently concluded international film festival in Goa. "Sahai met 23 filmmakers from India and abroad and others associated with the industry to clear the unresolved issues of taxation, VAT refund, visa, customs and security-related clearances and permission for shootings, among others," a senior ministry official said.
Chairman of Fortissimo Films Michael J. Werner, Julie Marlow of Australia, director Joel Frges and Eurimages executive director Roberto Olla from France were among the few foreign filmmakers who met Sahai. Vishal Bharadwaj, Rakeysh Omprakash Mehra, Zoya Akhtar and Raj Kumar Hirani, were some of the Bollywood big wigs who met him. Source: India Today

  Petrol in India costlier than in US due to VAT

  NEW DELHI, December 1, 2011: Petrol in India is costlier than in its neighbouring countries and in the US, primarily because of high taxes. Petrol in Delhi today costs Rs 66.42 per litre as against Rs 44.88 a litre price in the US, Minister of State for Petroleum and Natural Gas R P N Singh told Rajya Sabha in a written reply to a question. Even after the November 16 reduction of Rs 2.22 per litre in rates, petrol at Rs 66.42 a litre in Delhi is costlier than Rs 48.64 a litre in Pakistan.
  Whereas in Sri Lanka it is Rs 61.38 per litre, Rs 52.42 a litre in Bangladesh and Rs 65.26 per litre in landlocked Nepal. Incidentally, Nepal does not have a refinery and imports all its requirement from India. However, petrol in Europe is costlier than in India. In the UK, it is priced at Rs 104.60 per litre. Singh said of the Rs 66.42 per litre price of petrol in Delhi includes Rs 26.59 a litre because of taxes (both central excise and local sales tax or VAT).
  The US has only Rs 5.32 per litre tax on petrol while it is Rs 62.47 a litre in UK.

  UP traders oppose proposal of FDI in retail
  New Delhi/ Lucknow November 25, 2011: In the backdrop of the raging debate over Foreign Direct Investment (FDI) in retail, Uttar Pradesh traders on Thursday reiterated their stiff opposition to the proposal. The traders under the banner of Akhil Bharatiya Udyog Vyapar Mandal (ABUVM) maintained FDI in retail would spell death knell for the small time retailers.
  The traders are pressing for their 27 charter of demands from the central and state governments, including uniform Value Added Tax (VAT) rate across India, rising petroleum prices, corruption, constitution of a high-powered committee for traders, traders' pension, waiver of license/quota permit etc.

   VAT on any artificial enhancements termed "boob tax"
   Mumbai, November 2, 2011: The British HM Revenue and Customs is planning to impose a tax on cosmetic surgeries by slapping a Value Added Tax (VAT) on any artificial enhancements and procedures. This vanity tax is being termed "boob tax". It would send the cost of operations such as breast enlargements,
facelifts, tummy tucks and liposuction soaring by 20 per cent if implemented. And patients undergoing such operations will be liable to pay the tax unless they can persuade a doctor that the operation is being carried out for "therapeutic" reasons.
  The announcement has caused much furor amongst both patients and cosmetic surgeons. And while most stand against it, there are some like glamour model Peta Todds, who find it only fair that cosmetic surgeries,
just like cosmetics, should be taxed. "We pay VAT on all essential things like clothes and petrol. People who
have a surgery just to look better should also have to pay the tax. It's a luxury, not a necessity," she tweeted. Source: DNA

   Food processing industry seeks govt help to grow abroad

   Chennai October 24, 2011: The food processing industry in India is looking at government support, as tax incentives and other measures, to strengthen brand India abroad. The $14 billion food processing industry, growing at 12-13 per cent at present, could grow at higher rates if effective meaures are taken, said the industry body. Speaking to reporters on the sidelines of inauguration of Foodpro 2011, the ninth Indian Food Processing and Food Technology Fair organised by Confederation of Indian Industry (CII) in Chennai, Piruz Khambatta, chairman, CII National Committee on Food Processing and chairman and managing director, Rasna (P) Ltd, said: "The government should come out with tax incentives for R&D, value-added products, quality control and education to support the industry. We are also recommending a corporate farming structure in which the industry can lease farmland from farmers where the owners could produce agri products as per the requirements of the company."
   At present, on the one hand the government talks of the need for value addition in food processing while on the other end it imposes tax on value added products. "It is an irony,"  he said. Food processing segment
should be included in zero GT and zero excise duty regime along with lower value added tax (VAT) regime. It should also consider tax incentives for R&D and education programmes in the industry.
 Source: Business Standard

   VAT on sugar, textile from April 2012

   New Delhi, October 16, 2011: The Empowered Committee at a meeting held yesterday has decided to levy
value added tax (VAT) on sugar and textile. The VAT may be imposed 4-5 per cent on these items from April 1 next year. The meeting was held under the chairmanship of Deputy Chief Minister of Bihar Sushil Kumar Modi. Besides, Delhi Chief Minister Sheila Dikshit, who looks after the Finance Department of the Delhi government, Finance Minister of Haryana, Punjab and other states attended the meeting.
   Briefing reporters after the meeting, he said till 2005-2006, the Union Government was collecting additional central excise duty on tobacco, sugar and textile and the states were getting one per cent more in their share from the central divisible pool of the total tax proceeds. However, the central levy was abolished as recommended by the 13th Finance Commission and hence, the states too suffered losses on revenue. Source: Tribune News Service 

   Indirect tax reforms to rev up revenues, GDP

   New Delhi October 10, 2011: In its efforts to build a broad consensus on the proposed goods and
services tax (GST), the Associated Chambers of Commerce and Industry of India (Assocham) has said the indirect tax reforms would lead to buoyancy in government revenues, increase the country's GDP and reduce inflationary pressures. The GST would lead to reduction in prices of most manufactured goods by about 10 per cent, the 1920-established industry chamber said here today. "Once the GST replaces all multiple taxes, it is going to be the biggest tax reforms in independent India's history,"  it said in a recent study titled GST Beyond Growth.
  The tax-GDP ratio too may go up by 1.5 to 2 percentage points with the net revenue jumping by Rs 1.5 lakh crore a year, said the study. The GST will create a single Indian common market  and there will be no distinction between goods and services with seamless input tax credit allowed throughout the supply chain. The study assumes importance since Finance Minister Pranab Mukherjee had sought the help of industry chambers to build a consensus on the GST.
  The GST has already missed two earlier deadlines of 2010-11, 2011-12 and is again unlikely to be enforced from the next financial year starting April 1, 2012. Reason: differences between the Centre and states. While a Constitutional amendment is being considered by a parliamentary standing committee, the next financial year is the time set for implementing the GST, which is a comprehensive value-added tax on goods and services levied at each stage of the supply chain. The GST, which is an indirect tax to imposed by all states and the central government, is meant to replace existing levies such the state VAT besides the Centre-imposed excise duty as well as the service tax. Source: Business Standard
PSU OMCs hike in ATF prices depending on the local sales tax or VAT
  New Delhi, October 1, 2011: State-owned oil marketing companies hiked jet fuel price on September 30, 2011 by 1.5% as falling rupee made oil imports costlier. ATF price at Delhi's T3 airport was hiked by Rs. 899 per kilolitre (kl), or 1.5%, toRs. 58,578 per kl with effect from Friday night. ATF in Mumbai, home to the nation's busiest airport, was hiked by Rs. 907 per kl more to Rs. 59,359 per kl from Saturday, 1 October 2011. as against the old price of Rs. 58,452.31 per kl. Jet fuel makes up for 50% of an airlines' operating cost. ATF prices vary from airport to airport, depending on the local sales tax or VAT. The three fuel retailers revise jet fuel prices on the 1st and 16th of every month, based on the average international price in the preceding fortnight.

   Government panel for 0 percent duty on LNG

   New Delhi, September 19, 2011 (PTI): A high-level government panel has called for slashing customs duty on imported liquefied natural gas (LNG) to zero, instead of cross-subsidising the high-priced imported fuel by making domestic natural gas users pay more. An inter-ministerial committee headed by Planning Commission Member Saumitra Chaudhuri, in its final report, has recommended that the import duty on liquefied natural gas (LNG) should be aligned with that of crude oil, on which customs duty was brought down to zero from 5% in June. Also, the government should treat LNG/natural gas as a  "declared good", so that they have a common concessional rate of VAT.
   "The department of revenue (which was also part of the committee) has not agreed to the proposal for aligning import duty on LNG with that of crude. On the issue of declared good status in regard of VAT, the Department of Revenue did not wish to record a view," the report noted. The panel, which in its draft report a few months back had suggested averaging out the price of costlier imported LNG with cheaper domestic gas, did a complete u-turn in its final report by saying the proposal
was not feasible.

Petrol price hiked again depending on VAT and other local levies
   NEW DELHI, September 17, 2011: State-run oil companies on Thursday raised the price of petrol by Rs 3.14 per litre, the third substantial increase since January, a move which is expected to stoke inflation and upset household budgets. The decision sparked an immediate protest from UPA partner Trinamool Congress . Party leader Mukul Roy is reported to have conveyed the party`s opposition to the move to finance minister Pranab Mukherjee. 
   Oil companies had last raised petrol price by Rs 5 a litre on May 15. Before that, they had twice revised prices in January by Rs 2.50 a litre. Prices went up marginally due to an increase in dealer margin. Petrol prices vary from city to city depending on VAT and other local levies. 

   VAT on cigarettes to 20 per cent from 13.5 per cent in West Bengal
   Kolkata, September 2, 2011: The Bengal government today raised the value-added tax (VAT) on cigarettes to 20 per cent from 13.5 per cent, desisting from hitting the 30 per cent ceiling permissible after a switch earlier this week. The tax increase is unlikely to change the price many consumers pay as it will be largely borne by cigarette manufacturers and wholesalers. But the increased levy runs the risk of creating an "arbitrage opportunity" that can encourage smuggling from other states and somewhat blunt the government's drive to generate more revenue.
   While presenting the Finance Bill on Monday, finance minister Amit Mitra had said tobacco products were being put in a schedule that allowed VAT up to 30 per cent. The new rate, which was not specified then, was notified by the finance department today.
   What smokers pay for a pack of the most popular brands is expected to remain untouched since maximum retail prices are unlikely to be changed. ITC, which manufactures three out of every four packs sold in the country, sells all its popular brands at the same rate across the country, although the VAT rates differ from state to state. However, other players like Godfrey Phillips are likely to raise the prices of their low-priced brands at the retail level as well. In either case, the VAT increase in Bengal opens up a window of lucrative opportunity for unscrupulous operators if they smuggle in cigarette cartons from other states where the same tax is lower.

   Supreme Court notice to Centre on RIL natural gas VAT case
   New Delhi, August 25, 2011: The Supreme Court on Tuesday issued notice to the centre on a petition filed by the Uttar Pradesh government challenging an interim order of the Allahabad High Court staying the levy of Value Added tax (VAT) on the sale of natural gas by Reliance India Limited (RIL) to various buyers across the state. A bench of Justice Altamas Kabir and Justice SS Nijjar today sought the response of the central government on whether sale of natural gas to various buyers by RIL in the state would come under Central Sales Tax (CST) or the local Value Added Tax (VAT).
   Appearing for RIL, senior counsel Harish Salve argued that CST was already levied by the central government on the gas produced by the RIL. He argued that RIL cannot be subjected to double taxation involving CST and VAT. RIL has claimed that the delivery of natural gas from its KG D6 basin in Andhra Pradesh to various buyers including fertilizer plants across Uttar Pradesh fell under the central sale. It has claimed that it was not liable to pay the VAT levied by the Uttar Pradesh state government. The bench has directed the central government to file its reply within two weeks on the issue. The bench has also directed the parties involved in the case such as RIL, Kribio Shyam Fertilizers, Indo Gulf Fertilizers, IFFCO, Tata Chemicals, NTPC to file their respective rejoinder in another one week thereafter.
  The order of the Apex Court came over a petition filed by the Uttar Pradesh challenging a High Court interim order staying the demand order on the levy of VAT tax to the tune of around Rs 725 crore on sale of natural gas by RIL to various companies within the state during April 2009-November 2010.
  The state government had on June 6 last year held that RIL was liable to pay VAT to the tune of Rs 725 crores on the sale of Natural gas to various companies within the state for the assessing period of April 2009 to March 2010. Earlier on August 16, a bench headed by Justice DK Jain had recused from
hearing the case.

  The VAT on e-bikes are highest in Gujarat
Ahmedabad, August 9, 2011: The Gujarat government's Vat percentage is highest on the environment-friendly e-vehicles. The whopping 14.5 % VAT on electric vehicles has applied brakes on
promotion of these vehicles in the state. While Rajasthan, Punjab and Haryana do not levy any tax on e-bikes and e-cars, Delhi even offers subsidy on such non-polluting vehicles. Just because of high taxes, electric car, Mahindra Reva, is not sold in Gujarat. The electric car which is sold in Delhi for around Rs3.5 lakh, is priced at around Rs5 lakh in Ahmedabad. Because of high taxes, this e-car is expensive by almost Rs1.5 lakh in Gujarat. So we are not interested in selling the non-polluting car at this high price, said Pavan Sachdeva, GM (marketing), Mahindra Reva. According to him, Delhi not only levies zero VAT on such vehicles, it also gives subsidy to buyers. "So Reva is sold in the range of Rs2.8 lakh to Rs3.5 lakh there," he said. If VAT rate is brought down in Gujarat, the sale of non- polluting vehicles will get a boost in the state, which will also check the emission levels."The taxes on e-bikes are highest in Gujarat. This is a state where sale and use of such vehicles can be good, so if taxes are brought down, that will greatly help their promotion," said CEO of Hero Electric, Naveen Munjal. For more than a year, the association of electric two-wheelers and four wheelers has been writing to Gujarat government for reducing the VAT rate. "If state government cannot make it tax free, then it can reduce VAT from 14.5% to at least 4%. But in spite of several letters, there is no response from the government," said Sachdeva.
  Some fear that the government is not bringing down the VAT as it is afraid that other automobile companies may start demanding relief in taxes. "When we approached the government to reduce VAT on e-bikes, the answer we got was 'other two-wheeler manufacturers would demand the same','' said Jaysukh Patel, managing director of Ajanta Group, which makes Oreva e-bikes. Patel said that in Rajasthan, Delhi, Haryana, Punjab and Chandigarh, VAT on electric vehicles is zero. "Maharashtra, MP, UP and Karanataka levy 4% VAT on e-bikes. Tamil Nadu and Kerala levy tax of 12.5%. But Gujarat is the only state in the country, where VAT rate is 14.5%, which is highest in the country," said Patel. The director of Electrotherm Ltd, Shailesh Bhandari, believes if other states can levy zero tax, Gujarat can certainly bring down the rate. "VAT in Gujarat is the highest in the country," he said. Source: DNA
  Implementation of GST will boost India's growth: Assocham

  NEW DELHI, August  04, 2011 (PTI): The implementation of goods and services tax (GST) could boost the country's GDP by about 2 per cent annually, industry body Assocham said on Wednesday. "GST could increase GDP growth rate by 1.4 to 1.7 per cent with an annual revenue increase of Rs 1.2 lakh crore at current level," it said. At present, the gross domestic product (GDP), which is the sum of total goods and services produced in a year, is over $1 trillion (Rs 58.68 lakh crore). 
  Introduction of GST, which will subsume central and state taxes like excise, customs, service tax, sales tax and VAT, has been pending for years in the absence of political consensus. GST Constitution Amendment Bill is pending before Parliament. 
  The main concern of the Opposition-ruled states is that the new tax regime would erode their autonomy to levy taxes. Assocham said the GST will create a single Indian common market with supply chain efficiencies and scale up the economy.

VAT on tobacco products in Rajasthan is highest in India
  Jaipur, August 02, 2011: An effort by the Rajasthan government to curb tobacco addiction in the state by doubling Value Added Tax (VAT) on tobacco products seems to have gone up in smoke. In an indication of the blackmarket rampant in tobacco in the state, in just two operations recently, the Commercial Taxes Department has recovered close to Rs 1 crore in taxes and penalties from traders, while around hundred cases are presently under investigation.
  "We received information that tobacco products were being transported from neighbouring states where VAT is lower. In April we recovered Rs 49 lakh from 96 centres and in June Rs 47 lakh from 81 centres,?" Commercial Taxes Deputy Commissioner (Anti-Evasion) Gyana Ram said. While VAT on tobacco products is 40 per cent in Rajasthan, probably the highest in India, in neighbouring states like Haryana, Madhya Pradesh and Punjab, it is around 20 per cent.

  Haryana govt to exempt kerosene oil of Public Distribution System from VAT 

   Haryana, July 28, 2011 (PTI): Haryana cabinet gave ex-post facto approval to the decision of the
government to exempt kerosene oil being sold through the Public Distribution System from VAT. The decision to exempt kerosene oil from VAT was taken after a request in this regard was made by the Centre to reduce the burden of price rise on common man. The state has already done away with tax on domestic LPG and its rate of tax on diesel is the lowest in the country, an official spokesman said. The decision to revise the rates of toll tax on Gurgaon-Sohna-Nuh-Alwar Road has been necessitated to discourage the vehicles on NH-8 taking diversion to this road and for better revenue. 
   The commuters are using Gurgaon-Sohha-Nuh-Alwar Road as an alternative route to save heavy toll
being charged by National Highway Authority of India on NH-8. As the Gurgaon-Sohna-Nuh-Alwar Road (upto Rajasthan Border) has recently been  improved at a cost of Rs 347.87 crore, there would be further tendency of tollable vehicles to use this road as an alternative route, he said. It was, therefore, decided that the rates of toll tax should be made applicable immediately and these be increased to 1.5 times from this date. 

  VAT hike on mobiles could bolster grey market sales in TN

   Chennai, July 24,2011 (PTI): John Yesudass, Chairman of Wireless Gadgets India, makers of 'Techberry' brand mobile phones said, "We were earlier charging four per cent tax.Now we are absorbing increase in VAT. We do not want to increase the cost of mobiles." The increase would only result in customers buying products from neighbouring states where VAT is only four per cent, he said. According to ICA, Tamil Nadu witnessed a 10.5 per cent growth in 2011-12, generating revenues of Rs 2,375 crore. VAT revenue in mobile phones at four per cent for this period was Rs 95 crore, growing at 10 per cent per annum, it said. Mohindroo said the 14.5 per cent VAT would see a dip of 67 per cent in legal sales of mobile phones (phones sold with bills) at Rs 780 crore, compared to the previous year. However, the grey mobile phone market would see sales grow from almost nil to Rs
1,820 crore in the same period, he said. He warned of a serious dent on the mobile manufacturing and components industry sector in Tamil Nadu, now considered a "hub". "Mobile phones cater not only to the Indian market, but also to the world market. Our efforts to promote growth of the industry and build the industry for parts and components may get nullified" (with  this additional VAT), he said.

   Finance Ministry plans to bring more services under the tax net
   MUMBAI, July 19, 2011 (PTI):The Finance Ministry plans to bring more professions in the services sector under the tax net, a senior bureaucrat said here on Monday. He was speaking at a service tax-related event organised by the Associated Chambers of Commerce and Industry of India.
  "More areas in the services sector need to be brought under service tax. In India, this is tougher to do, because goods are sometimes classified as services and vice versa. The Centre has shown commitment to implement, which will subsume most of the indirect taxes as well as VAT on the state front, besides local levies," Ministry of Finance Joint Secretary V K Garg said.

   CM urged to exempt VAT for cotton textiles for two years
Coimbatore, July 13, 2011 (PTI) Southern India Mills Association (SIMA) today appealed to Tamil Nadu Chief Minister, Jayalalithaa to exempt or provide optional route, as prevails in the case of Central Excise, for raw cotton and cotton textiles, right from yarn to finished goods from VAT for a period of two years. The increase in VAT rate on raw cotton from four to five per cent would discourage any cotton development in the State, as it was expensive for the mills, as the CST was only two per
cent, SIMA Chairman, J Thulasidharan said in a press release here.
   Moreover, one per cent Market Committee Fee on cotton and cotton waste was also an additional burden to the textile mills in Tamil Nadu, he said. Spinning mills in Tamil Nadu were in a disadvantageous position due to the absence of raw material base, incurring Rs four to Rs five for bringing cotton from states like Gujarat, selling over 60 per cent of yarn in upcountry by spending equal amount for transport, he said. Huge spinning capacity being created in the cotton growing states was also threatening the very survival of the mills in Tamil Nadu, Thulasidharan said.

  Ice cream makers form association seeking reduction VAT
  Mumbai/ Ahmedabad July 11, 2011: In a bid to increase consumption and enhance quality standards, ice cream manufacturers' in the cooperative and private sectors of India have got together to form the Indian Ice Cream Manufacturers'Association (IICMA). Based out of Ahmedabad, the 80 member strong association was formally launched on Saturday after getting registered with the Registrar of Companies. "All small, medium and large ice cream players have come together to form the association. The move was driven by the need to promote ice cream consumption and upgrade the product quality," said Rajesh Gandhi, president, IICMA and managing director, Vadilal Industries Ltd.
  With the new association of ice cream makers formed, the industry will now be working towards seeking better measures including reduction value added tax (VAT). "Recently government added one per cent excise duty, over and above the VAT. Ice cream in India is considered a luxury and taxed highest. In Gujarat there is a 15 per cent levy of VAT on ice cream. In other countries, there are no tax on food item like ice cream. In India, it requires this attention," said Gandhi.
  According to Gandhi, the ice cream market in India is estimated at Rs 2,500 crore in the organised sector growing at 20 per cent. The per capita consumption is around 300 ml per annum in India while it is 700 ml in Pakistan, three litres in China and 22 litres in developed countries like the USA, Japan, Germany and others.

  Bihar Government makes foodgrains free of VAT

  PATNA, July 7, 2011: Deputy CM Sushil Kumar Modi said that the VAT on foodgrains like rice, wheat, pulse and flour has been fully withdrawn. "When our government came to power in 2005, the VAT on these commodities was four percent which we reduced it to one percent in 2006. Now in view of the escalating prices of essential commodities, we have decided to do away with VAT on them," he said. He added that with this relaxation, about 5,000 small and medium traders dealing in foodgrains whose annual turnover is up to Rs 100 crore will be benefited.
  Meanwhile, the food and consumer protection department has suggested that the Centre provide cash instead of foodgrains to the ration card holders under the proposed National Food Security Act (NFSA). Food and consumer protection minister Shyam Rajak said that this suggestion has been sent to the Centre in response to the state's opinion sought on the NFSA. The Centre is working on a draft Bill that will be placed before the Empowered Group of Ministers on food. It aims to provide legal right
over highly subsidized foodgrains to 68 percent of the country's population.

   Meghalaya reduces VAT on LPG, kerosene and diesel

   SHILLONG, July 4, 2011: Meghalaya exempted Value Added Tax (VAT) on cooking gas, kerosene and diesel to provide relief to consumers. With this decision, Meghalaya joins a handful of other States and Union Territories in India like West Bengal, Haryana and Delhi which had earlier reduced VAT on some of these products. The State VAT on LPG and kerosene is five per cent and diesel 12.5 per cent. The decision to reduce VAT on these items was taken by the Cabinet  after the UPA Government raised prices of these products on June 25.
  The Ministry of Petroleum and Natural Gas increased the price of Liquefied Petroleum Gas or cooking gas by Rs 50, kerosene Rs 2 and diesel by Rs 3 per litre due to spill over effect of increase in price of crude oil in the International market. The Cabinet's decision would provide relief to the extent of Rs 20.13 paise per domestic cylinder of LPG, Re 0.67 paise per litre in respect of Kerosene and exemption of Rs 0.50 paise per litre of diesel.

  Orissa waives VAT on LPG, PDS kerosene

  Kolkata/ Bhubaneswar/ Berhampur June 29, 2011: To reduce the impact of hike in prices of  petroleum products on the people in the state, the Orissa government has decided to waive four per cent Value Added Tax (VAT) on LPG and kerosene supplied through the Public Distribution System.   "As you are all aware, the Government of India has hiked the prices of petroleum products. This has given a blow to the people of the country, especially the middle and low income groups. As a measure of relief, my government has decided that VAT will be completely waived on LPG and PDS kerosene.  This is the maximum relief that the state can offer to the people?, Chief Minister Naveen Patnaik told mediapersons. The VAT exemption on LPG and PDS kerosene would mean a relief of Rs 16 per LPG cylinder and a burden of Rs 40 crore per annum on the state exchequer. He, however, ruled out the possibility of a further cut in VAT on diesel.
  "As far as diesel is concerned, the state government has already brought down the VAT on diesel to 18 per cent some time back, one of the lowest in the country. It would not be possible for a poor country like Orissa to bring it down further. I urge upon the Government of India to reduce diesel prices so as to bring some relief to the people?, Patnaik said.
  Meanwhile, petrol stations in several parts of the state were forced to close their shutters for about two hours when the supporters of BJP's youth wing staged demonstration at the filling stations. The activists of Bharatiya Janata Yuba Morcha (BJYM) closed the filling stations as a part of their state-wide economic blockade, protesting the recent hike in prices of petroleum products.
  Source: Business Standard"

  Maharashtra won't decide on LPG, charges 23 per cent VAT on diesel
Mumbai June 27, 2011: The Congress-led government in Maharashtra is not in a hurry to respond
to the party high command?s call to reduce taxes levied on diesel and LPG cylinders. Instead, Chief Minister Prithviraj Chavan and his deputy, Ajit Pawar, clarified that any decision would be taken by the state cabinet only after carefully looking at the necessary numbers.
  The Maharashtra government does not levy value added tax (VAT) on LPG cylinders but charges 23 per cent VAT on diesel. Of the total collection of sales tax/VAT of Rs 42,000 crore in 2010-11, about Rs 3,500 crore was through the VAT on diesel. There are about 3,300 petrol pumps in the state whose monthly diesel sale is about 600,000 kilolitre and 250,000 kilolitre of petrol.
  Pawar, who belongs to the Nationalist Congress Party, a key ally of the UPA at the Centre, clarified that in his budget for 2011-12 he had spared LPG from VAT. "There is no VAT on LPG cylinders. However, in the case of VAT on diesel, the government will examine."
  On West Bengal Chief Minister's decision to cut four per cent VAT on LPG cylinder, saving Rs 16 for the Bengal consumer, Pawar said West Bengal could not be compared with Maharashtra. "West Bengal was charging four per cent VAT on LPG cylinder which will not be collected. This would effectively put the burden of hike at Rs 34 and not Rs 50 on consumers in West Bengal," he noted. Ravi Shinde, president of Petrol Dealers Association, Mumbai, said the government?s decision to increase diesel prices would put additional burden on auto fuel dealers.

  Bank employees hold massive rally to reduce the highest VAT in Punjab 

  PATIALA, June 24, 2011: A massive rally was organized here in front of the State Bank of Patiala head office by various unions of employees. The road was blocked for two hours to lodge protest against the price hike of petrol, privatisation, un-employment, corruption and other issues concerning common man. While addressing the rally, N K Gaur, vice-president, All India Bankers Employees Association, urged the Central government to withdraw the recent hike in petrol prices and also urged the Punjab government to reduce the highest VAT levied on petrol which has resulted in Rs 7 per liter extra cost of petrol prices than other states. Nirmal Singh Dhaliwal, state general sectary of AITUC said that all the central trade unions organized a country-wide chaka jam on Thursday in protest against the LPG policies, violations of labour laws, to abolish the contractual and outsourcing system of employment, price rise, retrenchment and repression on the trade union struggles.

  Gujarat to raise Rs1,000 crore via securities sale

  Gujarat, June 21, 2011 (DNA): The state government on Monday announced sale of Gujarat Government Stock (Securities) worth Rs1,000 crore for a tenure of 10 years. A finance department release said that the sale is being undertaken to fund capital expenditure on development programmes, particularly on schemes included in the Annual Development Plan for 2011-12. The release said that there has been a consistent increase in revenue income of the state over the years. Implementation of VAT and other fiscal measures have contributed to this. The state government has also said that it is committed to zero revenue deficit and to contain fiscal deficit to 3% of the Gross State Domestic Product (GSDP). The fiscal deficit of the state was 3.53% in 2009-10 and 3.11% in 2010-11. It is projected to be 2.43% in 2011-12. As against revenue deficit of 1.62% in 2009-10 and 1.08% in 2010-11, the state government has estimated 0.08% surplus budget in 2011-12.

  Cut import duties on automobiles, components: Ratan Tata

  New Delhi, June 13, 2011 (PTI): At a time when the Indian automobile industry is strongly opposing lowering of import duty in the proposed India-EU FTA, Tata group chief Ratan Tata has favoured cutting tariff on vehicles and components coming from overseas. In an interview to the market research firm JD Power, Tata said such high import duties are unrealistic and create an artificial barrier of protection for local companies.
  He also said India does "not have an automobile industry" as "we have assemblers of foreign brands" and only Mahindra & Mahindra and Tata Motors actually develop and manufacture products in the country.” “I also think that very high rates of import duty should be reduced. They're unrealistic and create an artificial barrier to protect the manufacturers in India," Tata said. Similarly, the import duty on components should dramatically reduced so that manufacturers based in India can source components at affordable rates, he added.
  The Indian automobile industry, primarily the homegrown makers, are strongly opposing lowering of import duty in implementing the India-EU FTA saying that it will threaten the competitiveness of domestic firms. Components players are also of the view that reduction of duties will lead to dumping of products in India. At present, a fully-built vehicle attracts a customs duty of 60 per cent, which finally comes out to be around 110 per cent after considering sales tax, VAT and other levies. For pre-assembled engines, transmissions and gearboxes, customs duty is fixed at 30 per cent. Other auto parts attract a customs duty of 10 per cent. On the domestic industry, Tata said: "We really don't have an Indian automobile industry. We have assemblers of foreign brands, and most of them are here in one form or another. 
  “Only Mahindra and Tata Motors actually manufacture and develop vehicles  in India. As a result, the auto industry in India today is, therefore, a hybrid of several assembled foreign vehicles and a relatively small range of indigenously developed products." He said to become a "truly Indian industry", it is necessary to set up engineering facilities here, and then design and produce vehicles specific for the country. "I would expect to see considerable growth in the industry by 2020. Hopefully, it would benefit Indian players like Mahindra and Tata Motors and help expand market share," he added.

  Protest against VAT by cross LoC traders in J&K

  SRINAGAR, May 28, 2011: Cross Line-of-Control (LoC) traders today held a protest here demanding revocation of Value Added Tax (VAT) on trade between two parts of the divided Kashmir. "As per the VAT Act, sellers and buyers should be in the state control, where as the sellers and buyers of Pakistan Occupied Kashmir (POK) are not in control of the J&K government. PoK dealers cannot register their firms under VAT," General Secretary of Salamabad-Chakoti Traders Unions
Hilal Turki said. He said keeping in view the ground situation, VAT should not be imposed on the cross-LoC trade. 
  The traders had earlier suspended the trade for past eleven weeks in protest against government's decision. The traders also put forth seven other demands including increase in the number of trading commodities from present 14 items by convening a meeting of traders from both sides of LoC. Source: Economictimes

  Soft-drink major hikes prices on rise in VAT

  Mumbai, May 23, 2011: Soft-drink major Coca-Cola has hiked prices by up to five per cent in at least two major markets such as Maharashtra and Delhi. This is the second price increase being done by the company in the last two months. In April, the firm that sells Thums Up, Sprite, Fanta and Maaza, had hiked prices of its aerated beverages by up to nine per cent due to surging packaging and transportation costs. After the price hike, a 1.25-litre bottle of Thums Up is now available for Rs 39, up from Rs 37. Prices of 200 ml bottles of Sprite, Maaza and Limca are up by Rs 1 from Rs 9. The company has also increased prices of its two-litre bottles of Sprite and Thums Up to Rs 63 from Rs 60. The Indian subsidiary of the US cola giant blames increase in the value added tax (VAT) levied by state governments of Maharashtra and Delhi for  price hikes. 
  The state value-added tax (VAT) has increased to 20 per cent from 12.5 per cent earlier, said senior Coca-Cola India officials. When contacted, a Coca-Cola spokesperson confirmed the development and said the firm had increased prices of select packs of all its carbonated beverages. “Rising VAT has forced our bottling partners to undertake marginal price increase on certain packs in Maharashtra. Providing consumers with choice and value continues to be the cornerstone of our business strategy,” said the spokesperson.
  With the cola majors failing to persuade the state government to roll back the VAT hike they may be forced to pass on the increase in costs to consumers. Coke seems to be taking advantage of its strong franchise to take the lead in this area, said another expert. Coca-Cola has also been battling rising transportation costs as a result of the price hike in auto fuels like LPG, diesel and petrol. The cost of plastic polymers, which goes into making the transparent polyethylene terepthalate (PET) bottles, too, has been on an upswing.

  Branded garments in for more relaxations

  Mumbai, May 09, 2011: The government proposes some more relaxations for the branded garments sector, besides enhancement of duty abatement from 40 per cent to 55 per cent. One of the major relaxations proposed for the sector is exemption to job workers who work for brand owners in India. This category may not be required to pay 10 per cent excise duty, which the government imposed on branded garments in the Union Budget 2011-12.
  Second, branded school and corporate uniforms and materials may also be exempted from excise duty. "This means any branded uniform or blankets, quilts, etc for schools, colleges, hotels, airlines or for any other industry is likely to be exempted from payment of excise duty," explained an official source.
  Third, documentation and procedures for availing exemption from excise duty for small-scale industries may be simplified. Sources said excise officials might not inspect documents. Rather, mere certification from a chartered accountant or documents submitted for value added tax (VAT) and VAT credit would be sufficient to claim excise exemption. The finance ministry had imposed 10 per cent excise duty on branded garments in the last Budget but later decided to enhance the cut-off limit of industries for excise payment. This was done by increasing the turnover limit eligible for seeking exemption by allowing duty abatement from 40 per cent to 55 per cent but only for 2011-12. With this relief, a unit would be eligible for SSI exemption in 2011-12 even if it had a turnover based on retail sale of Rs 8.9 crore in 2010-11. Besides excise duty imposition, the sector, however, received a slew of benefits, from reduction of custom duty on various chemicals used for manufacturing of synthetic textile to reduction of excise duty on textile machinery. Also, basic customs duty on raw silk of all grades had been cut from 30 per cent to five per cent and specific tariff rate of 10 per cent had been prescribed for jute yarn, while it was exempted from excise duty. Textile items have been exempt from additional duties of excise under the Goods of Special Importance Act, 1957. Source: Business Standard 

   Gujarat cuts tax on aviation fuel

   AHMEDABAD, May 5, 2011: Gujarat government has sharply reduced tax on aeroplane fuel for flights operating within the state to encourage intra-state aviation. Value-added tax on Aviation Turbine Fuel was cut from 30% to 4% for all non-scheduled flights days after the state roped in Capt Gopinath-led Deccan Charters to start intra-state aviation service. An aviation policy is in the works, a state official said. Corporates operating own flights in the state can now save up to 20% on fuel costs. Fuel cost constitutes around 40% of the total operating cost of an airline. Business groups like Adani, Reliance, Essar, United Phosphorous, Sterling, Electrotherm among others regularly use own planes in the state.Aviation experts say the decision will boost business travel and tourism within the state. Gujarat is among the top three states that attract highest domestic investments.  "Scheduled flights are already getting the benefit of lower VAT on ATF. Now the same rate is applicable to non- scheduled flights," said Vipul Mitra, principal secretary in the state aviation and tourism department. The finance department has also given its nod to the aviation department's move. Source: The Economic Times

   Tripura set to increase VAT 
  Tripura, April 25, 2011 (UNI): To manage the financial crisis Tripura government has enhanced the Value Added Tax (VAT) schedules that would lead to price hike of all essential commodities, including fuel. However, the Opposition has demanded to roll back the decision. Tripura had been suffering from the loss of more than Rs 1000 crore at the beginning of financial year 2011-12 due to awarding of less funds by 13th Finance Commission (FC) as compared to the state’s demand, a government report said.  According to officials' estimate the state would be able to earn an additional revenue of Rs 55 crore with the hike of fuel price that would increase the internal revenue to Rs 598 Cr, which was Rs 470 Cr in last 
  TRAI bats for domestic tele gear makers
  New Delhi, April 15, 2011: Despite being the fastest growing telecom market in the world, domestic manufacturers account for only 12% of the total equipment required in a network. Now, in a boost to domestic firms, the Telecom Regulatory Authority of India (TRAI) has come out with a policy to boost home production. TRA  The regulator has also proposed limiting excise duty and VAT (value-added tax) on indigenously manufactured products to 12% and a deferment of excise, CST (central sales tax), VAT and GST (goods and services tax) for a 5-year period for local companies with sales of less` than R1,000 crore.

  Traders buying wheat from UP, Rajasthan on Punjab's high VAT
   Chandigarh, April 11, 2011: The total tax paid by a private trader in Punjab works out to 14.5 per cent With Punjab raising Value Added Tax (VAT) on wheat purchase from 4 per cent to 5 per cent. Due to higher VAT on whet private traders have decided to go to Uttar Pradesh  and Rajasthan to purchase wheat.The total tax paid by a private trader in the state works out to 14.5 per cent.

   Assocham wants Uttar Pradesh government to decrease VAT on cigarettes

   March 25, 2011: Associated Chambers of Commerce and Industry of India (Assocham) has urged the Uttar Pradesh government to iron out Value Added Tax (VAT) rate on cigarettes and fix it at 12.5 per cent .The body said such tax divergence among states promoted unhealthy trade practices and encouraged smuggling of goods. 
  Uttar Pradesh government had recently hiked VAT on cigarettes to 13.5 per cent along with 5 per cent other state levies like octroi. Assocham lamented this was in spite recommendations of the central empowered committee of state finance ministers in January 2005 to maintain a general VAT rate of 12.5 per cent on cigarettes. "This divergence in VAT rates will lead to large-scale smuggling, evasion of taxes and other criminal activities," Assocham national secretary general D S Rawat wrote in his letter to chief minister Mayawati. The chamber has recommended a uniform VAT rate on cigarettes would encourage legitimate sales of cigarettes thereby increasing state revenue. It would also be consistent with the principles of VAT and proposed Goods and Service Tax (GST) regime. Assocham opined that disparity in VAT rates would distort the market leading to illegal activities like smuggling, tax evasion and breeding ground for the entry of organized crime syndicates.

   Aluminium utensil makers befuddled over Excise duty
   New Delhi/ Chandigarh March 22, 2011: Imposition of excise duty on utensils has not augured well for the utensil manufacturers in the region, with the industry being befuddled over the decision. Federation of All India Aluminium Utensil manufacturers President Bharat Garg maintained, levying of 1 per cent Excise duty on aluminium has left the industry confused. In the Union budget 2011-12, of the 370 items which were exempted from Central Excise Duty but chargeable to Value Added Tax, 130 items have been brought under 1 per cent Excise duty. 
   Representatives from the aluminium utensil industry are not impressed with inclusion of utensils under the Excise ambit. Members of Aluminium Utensil Manufacturing Association Jagadhri (Haryana) also maintained, while 370 items as mentioned in the budget speech are taxable under VAT, prejudice should not have been done with select items. 
   Delhi fuel retailers pitch for lower VAT on diesel
   NEW DELHI, March 15, 2011 (PTI): The Delhi Petrol Dealers Association (DPDA) has requested the state government to reduce Value-Added Tax (VAT) on diesel to 9 per cent from 12.5 per cent at present, in line with the neighbouring state of Haryana.  "400 petrol dealers of Delhi are seeking parity in VAT with Haryana in the coming Delhi Budget for the year 2011-12 so that smuggling of diesel can be checked," DPDA Vice-President Nishit Goel said in a statement. The Delhi government, led by Chief Minister Shiela Dixit, is scheduled to table the Budget in the Assembly on March 22.Due to the Rs 1.25 differential between the price of diesel in Delhi and  Haryana, most transporters and taxi fleet owners prefer to buy more polluting Euro 3 Diesel from Haryana pumps rather than the eco-friendly Euro 4 diesel available in the capital, he said. 

Over 75 Percent of Mobiles Sold Without VAT in India
   New Delhi, March 14th, 2011: The Central Board of Direct Taxes (CBDT) released a statement on March 13, 2011 saying that a series of raids have been conducted on several mobile phone retailers around New Delhi who were selling phones which were not properly registered and are considered to be a potential security threat. According to the CBDT, retailers have been importing mobile phones which do not have the legally required International Mobile Equipment Identity
(IMEI). The devices were predominantly imported from China. No records are made of the phones as they enter the country, and they are sold to consumers with no Value Added Tax (VAT) charge.
   The CBDT raided 59 separate retailers across New Delhi, and found evidence of INR 2.3 billion (approx. USD 50.84 million) of unpaid VAT. Tax authorities have already closed the stores of some retailers who were found to be avoiding VAT levies or selling illegal handsets. According to the Indian Cellular Association (ICA) approximately 30 percent of the handset sold in New Delhi are imported from China with no EMEI, and sold with no VAT charge. High-end phones are even more likely to be sold without a VAT levy, with nearly 75 percent of phones costing above INR 10 000 (approx. USD 220) are sold without paying taxes. Customs data shows that nearly 7.3 million phones were imported into India in 2009, through the New Delhi Airport alone, and logistic difficulties and it is impossible to verify the EMEI number of each device.

After 54 years, states free to levy VAT on sugar and textiles
  Mumbai March 4, 2011: The Union government has allowed the states to impose tax on sugar and textiles for the first time in 54 years.  In his Budget, the finance minister proposed to amend the Additional Duties of Excise (goods of special importance) Act, 1957, and decided to remove sugar and textile from its schedule. After this amendment, states are free to levy value added tax on these commodities after 54 years. These commodities were put under the scheduled commodities, with the enactment of the Additional Duties of Excise Act in 1957 by the Nehru  government. Earlier, the Centre could only levy this tax on these commodities. 
  Due to the amendment, the Centre has given back these powers to states, which are scouting for revenues, post implementation of the goods and service tax. "States will be free to levy VAT on them once the finance Bill is signed by the President and it comes in force," said Dilip Dixit, senior advisor, Tax & Regulatory Services, Indirect Tax, KPMG. However he feels, "It is unlikely that any state government will do so in the near future." 
  The tax on these commodities could be a maximum of five per cent. At present, about 16 commodities are notified as declared goods. These include coal, cotton, cotton yarn, crude oil, hides and skins, iron and steel, jute, LPG for domestic use and oil seeds. The amendment will be effective after passing of the Finance Bill. Source: Business Standard

Eye on GST, govt prunes exemption list
  New Delhi, March 1, 2011: To prepare the ground for the introduction of the Goods & Services Tax (GST), Finance Minister Pranab Mukherjee has proposed to prune the excise duty exemption list by levying a nominal central excise duty of one per cent on 130 items currently enjoying exemption. He also proposed to enhance the lower rate of central excise duty from four per cent to five per cent, saying most states had increased their merit rate of Value Added Tax (VAT) from four per cent to five per cent. The proposals relating to excise and customs are estimated to result in a net revenue gain of Rs 7,300 crore to the government, against a loss of Rs 11,500 crore from the proposals on direct taxes. Most of this gain
will come from excise duty measures, as the government is trying to minimise exemptions. 
   At present, there are as many as 370 goods that enjoy exemption from central excise duty but are chargeable to VAT by states. The exempted 130 items are mainly consumer goods like food items, mobile phones and compact discs. No Cenvat credit will be given for manufacturing these items. Basic food and fuel, precious metals and stones would continue to enjoy exemption. In case of jewellery and articles of gold, silver and precious metals, the levy would apply only to goods sold under a brand name. The remaining 240 items would be brought into the tax net when the GST is introduced.

   Record VAT and sales tax revenue in UT

   CHANDIGARH, February 21, 2011: Owing to consistent enforcement of excise and taxation operations against transporters, and statistical notices to at least 200 city-based defaulting shopkeepers and traders, the administration has
been able to generate a record value added tax and sales tax (VAT-CST) revenue of Rs 886 crore this year.  Being the highest figure in the last five years and an increase of 30% over last year, it is also said to be the per capita highest tax
received in the country this year. There are as many as 13,000 VAT dealers across the city, many of whom had been regularly avoiding VAT payments. By end of  March-end, the department expects to  a VAT revenue of Rs 1,000 crore.

ASSOCHAM has called for inclusion of natural gas with uniform VAT across the country.
   February 17, 2011: ASSOCHAM has called for inclusion of natural gas in the list of declared goods under section 14 of the Central Sales Tax Act with reasonable and uniform value added tax across the country. VAT laws of some states restrict availing input tax credit if natural gas is used as fuel and fertiliser feedstock. After the introduction of VAT from April 2005, natural gas was kept under revenue-neutral rate of 12.5%. The Associated Chambers of Commerce and Industry of India said that in Rajasthan it is levied at 5% under industrial input but some states are levying sales tax at 20%. Natural gas has emerged as a clean and energy-efficient resource, a key industrial input and the most preferred fuel due to its environment-friendly nature. The fertiliser and power sector consume over 70% volume of natural gas available in India. Due to high rate of sales tax or VAT coupled with entry tax and many restrictions with regards to availing input tax credit, the consumers get adversely affected, said ASSOCHAM in pre-Budget memorandum for 2011-12. 

High VAT deters growth of Punjab food processing units
   Delhi. February 15, 20011: The food processing units scattered across Punjab are languishing due to high tax structure framed by the state government. The units engaged in manufacturing of bakery products, branded rice processing and wheat processing are in a tight squeeze due to a value added tax (VAT) of 13.5 per cent. The state government had imposed a 10 per cent surcharge on VAT in the recent past and the industry has been sending its delegations to the state government to withdraw this in the coming budget.
   According to All-India Bread Manufacturers Association President Ramesh  Mago, "The food processing industry in Punjab could have proliferated due to availability of plenty of grains and green vegetables but the adverse tax structure has undermined the growth of this industry". He added, there is no VAT on this industry in Uttar Pradesh and Himachal
Pradesh so they cannot export their products into other states. At the same times, the manufacturers in the neighbouring states have the advantage of selling the same in Punjab due to the lower cost. He apprised, many small manufacturers have cut down their production due to non-viable business proposition.
  According to CII Punjab State Council President and Mrs Bectors Foods Specialities Limited Deputy Managing Director Akshay Bector, the estimated size of the food processing industry in Punjab is in a range between Rs 800 crore and Rs 1,000 crore. Except for half-a-dozen big players, mostly there are small and medium units. He said, the sweets are exempted from tax and dry fruits are charged four per cent VAT. So, it is not conducive for the state to charge cheaper goods with higher VAT in the state and allow the neighbouring states to earn profit. Source: Business Standard

  FM must accept FIEO's proposals

  New Delhi, February 7, 2011: The new president of the Federation of Indian Export Organisations (FIEO), Ramu Deora, has presented some useful points before the finance minister in his pre-Budget memorandum. Some of these are workable. The essential thrust of the presentation is that simplification of procedures, reduction in paperwork, clarity on policies, quick decisions on litigations, reduction in transaction costs, quicker refunds and a greater coordination between various government agencies will not only help exporters exceed the targets for the current year but also exceed the target for the 2009-14 period by over 25 per cent. In fact, most of these suggestions do not cost money but only call for responsive administration.
  FIEO has highlighted the problems caused by malfunction of Customs EDI systems and plethora of paperwork despite on-line facilities. Difficulties in getting refund of service tax and refund of accumulated Cenvat Credit are problems that have not received adequate attention. Huge claims are held up on frivolous objections of purely technical nature. Deora wants service tax refunds to be handled through All Industry Rate of Drawback, a single rate for customs, excise, VAT and service tax and a single Customs/excise bond covering all eventualities instead of bond for each transaction.
  FIEO wants continuation of income-tax exemption for export-oriented  units, income-tax concession for units exporting more than 75 per cent of the production and waiver of TDS (tax deducted at source) for commission to foreign agents. Source: Business Standard 

  Himachal Pradesh increase VAT on tobacco items

  Shimla, February 4, 2011: Himachal Pradesh Voluntary Health Association (HPVHA) hailed the decision of Himachal Pradesh Cabinet for increasing VAT on tobacco Products from 13.75 percent to 16 pc. The Global Adult Tobacco Survey India 2009-10 conveys that about 21 pc (equals 1276222 persons) population of this hill state is using tobacco product in one or the other of its form, consuming 18 pc of total tobacco production, which is higher than that of the average tobacco users in Northern India. To be precise, Himachal Pradesh has 18.1 pc of the male population of 15 years and above, who are daily-users of tobacco products as compared to the average of 16.5 pc in the Northern India.
  The decision of the cabinet is to impose uniform taxation i.e. 16pc on all the tobacco products – cigarettes, cheroots, cigars, bidis, oral tobacco products-. Earlier, the tax on bidis was less, i.e. 4 pc only. It meant a loss of Rs1.94 crore annually to the state government. The  total expenditure of the population of Himachal Pradesh on Bidis annually is Rs16.21 crore. VAT collected at the rate of 4 pc on it meant revenue of Rs65 lac only. With VAT increased to 16 pc, the revenue will go up to Rs.2.59 crore.

Plea to waive VAT by Traders in Ranchi
  RANCHI, January 30, 2011: Social organisations used Mahatma Gandhi's death anniversary, observed as Martyr's Day, to highlight their long-pending demands and draw the attention of the people in power towards the causes.Traders in Ranchi distributed rose buds to the commuters on Main Road with a small card that appealed to the government
to repeal VAT on cloth and blanket. The card reads "Kadpe se VAT wapas lo" (waive value added tax from cloth). Traders organised a small awareness programme and announced to intensify stir if items like bedsheet, towel and pillow covers were not freed from VAT.

  Consensus on goods and services tax may take time: Pranab Mukherjee

  New Delhi, January 24, 2011 (PTI): Finance minister Pranab Mukherjee today said the Centre is working at a "political level" with states for countrywide roll-out of goods and services tax (GST), but it may take some time to arrive at a consensus on the new indirect tax regime. "I am hopeful that it would be possible to achieve the success in bringing the consensus though it may take some time," Mukherjee told reporters here.
   Once implemented, GST will subsume indirect taxes like excise duty and service tax at the central level and VAT on the state front, besides other local levies. "At the political level, we are working on it (GST) to evolve the consensus in close cooperation with the Empowered Committee of State Finance Ministers," Mukherjee said.
  The Centre has proposed a three-tier GST structure. As per the proposal, GST will be levied at two rates on goods --a concessional 6 per cent on essential items and 10 per cent for others -- while services will attract 8 per cent GST. These will be collected by both the Centre and the states. The original deadline of April 1, 2010, for roll-out of GST has already
been missed and the Centre has said it will make efforts to roll it out from April 1, 2011. However, due to the lack of consensus between the Centre and states on the issue, it is likely this target will also be missed.
  The proposal for roll-out of GST, touted as the most significant indirect tax reform since the introduction of state-level VAT, has been hanging fire on account of persisting differences between the Centre and states on the GST Constitution Amendment Bill. Amendment of the Constitution is required to enable the Centre to impose tax on activities other than manufacturing and for the states to levy service tax, under the GST regime.

   People want govt to slash VAT on fuel in Rajasthan

  JAIPUR, January 18, 2011: The de-regulation of petrol prices has introduced people to a regime of market economics,
where prices are determined by demand and supply. As crude prices have crossed $90-mark and set to touch $100 per barrel, people in Rajasthan   have once again started asking why can't the government reduce high VAT rates to cushion the spike. The government of Rajasthan levies a VAT rate of 28% on petrol and 18% on diesel.
  Every time petrol prices go up, the governments' (Both Central and state) tax kitties get a boost. While it's win-win situation for the companies and the governments, the consumer remains a perennial loser. Today, if the retail cost of petrol is Rs 52 per litre, 50% of that price is due to various taxes. While the Centre imposes taxes like customs duties, excise, and cess constituting 25%, taxes at the state level in the form of VAT, dealer commission, and transportation cost, account for another 22-24%. Source: Times of India.

  Value added tax (VAT) on petrol is the highest in Punjab

  Chandigarh, January 16, The 10 per cent hike in petrol prices in the past one month will see a vast shift in sale volumes of the fuel from Punjab, to the neighbouring states of Haryana, Himachal Pradesh and Union Territory of Chandigarh. Since value added tax (VAT) on petrol is the highest in Punjab, dealers in the state, especially those having their operations near the state's  border, are worried that they will loose out on huge volumes in sale to these states.
   Because of the high taxes in Punjab, vis-à-vis Haryana, Himachal and Chandigarh, petroleum dealers in the districts of Ferozepur, Bathinda, Barnala, Sangrur, Patiala, Ropar, Hoshiarpur, Gurdaspur and Mohali, have been witnessing a steady shift in business to these states. Petrol in Punjab has been the most expensive in this region, while it is the cheapest in Haryana. After yesterday?s hike, petrol in Haryana is cheaper by around Rs 6.40 per litre, and in Chandigarh by Rs 5.95 per litre. Petrol in Himachal is cheaper by about Rs 3.90 per litre.
  As a result, residents of these districts prefer to get their fuel from the neighbouring states, where petrol is cheaper. "Petroleum dealers are losing out on huge volumes in business, because of high taxes in Punjab. While Haryana does not impose any cess, octroi or surcharge on petrol, which ensures that rate of petrol is cheaper there. Chandigarh imposes 10 per cent surcharge on VAT, but in Punjab, consumers have to pay VAT, cess, surcharge and octroi, leading to a 33 per cent in state taxes. In this time of high inflation, more and more consumers in the border districts are now buying petrol from neighbouring states," said JP Khanna, president, Punjab Petroleum Dealers Association.  Source: Tribune news

[ About Jute] [Jute prices] [ Jute Organisation] [ Directory] [ Jute Technology] [ Diversification] [ Statistics ] [ Jute Policy ]
[ FAQ] [Railways] [ Airways] [ Weather] [ Contact Us ] [Advertise With Us] [ About Us] [Disclaimer

Site copyright ã 2002, Worldjute.com All Rights Reserved.