Uttar Pradesh has also hopped onto the Value Added Tax (VAT) bandwagon. Trade and industry in the state have been brought under VAT from January 1, 2008. With this, all states and Union Territories have now joined the new tax regime.
VAT all the way
- UP becomes the last state to shift to VAT
- First step towards a GST from 2010
- Centre sets up a committee in December 2007 to draw the roadmap for GST
- GST is accepted as a universal best practice
UP CM Mayawati termed the implementation of VAT as a historic step that will help the common man get essential and quality items at minimum prices. Already, 91 items, including kerosene, milk and medicines, have become cheaper on account of the reduced levy.
The implementation of VAT by all states is significant. It is widely seen as first step towards a GST from 2010. The proposed move to a GST, analysts feel, will ease the situation considerably. Says S. Madhavan, Indirect Tax Leader, PricewaterhouseCoopers, India: “It will do away with cascading taxes and the multiplicity of taxes and tax rates. It will make the system more transparent and less complex. Businesses need to start preparing themselves for the switch and engage with the tax authorities to ensure that the GST system that emerges is as userand business-friendly as possible.”