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Delhi FM says VAT will increase tax burden on people

PTI - New Delhi

Delhi finance minister, M S Saathi, has said the proposed value added tax would generate higher revenue to the state but would result in increasing the tax burden to traders and business community.

“Of course, it is not friendly towards people, exporters and traders. How can I justify myself jumping from 4.0 per cent sales tax to 12.5 per cent vat. This step will definitely increase the tax revenue but the people have to ultimately carry the entire burden of tax,” Mr Saathi said at the FIEO seminar on vat.

He expressed concern over the apprehension of traders on vat to be implemented from April 2003, but said “this system has been adopted globally overwhelmingly.” Mr Ramesh Chandra, secretary of the empowered committee on vat, said states do not have the intention to exploit traders and exporters in the vat regime. He said procedures need to be streamlined and mandatory filling up of some forms should be abolished, as it was a major source of corruption.

FIEO vice president, Mr S Mittal said there were apprehensions on whether exporters have to pay vat and on issues like advance payments and the delays in refund.

Meanwhile, the group of ministers (GOM) on labour reforms, headed by deputy chairman of planning commission, Mr K C Pant, met recently to consider issues relating to enactment of a legislation on contract labour.