Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
With the deficiencies in the existing tax system, the Government of India (GOI) took the initiative to replace this system with subnational VAT. GOI as a facilitator. Empowered committee a good example of cooperative federalism.
CST Act, 1956 to govern principles of taxation of such sales. The tax, however, has been assigned to the states The tax is levied on the basis of origin when goods are sold to another states. For interstates sales while the dealers make use of C form, govt. deptt. uses D form for availing same benefits.
What
Tax
Multi-point A state
subject
VAT is a tax on sale or purchase of goods levied at every stage from manufacture or first sale in chain of distribution till the retailer, with a provision to deduct tax paid or payable on purchase from tax payable on sale.
Brief
VAT
1954
50
Countries switched over to VAT during last decade 130 countries worldwide have introduced VAT over the past three decades
Over
Indian VAT
Implemented in all states in a phased manner
Evolution of VAT
The first preliminary discussion on State-level VAT took place in a meeting of Chief Ministers convened by Dr. Manmohan Singh, the then Union Finance Minister in 1995. - Basic issues on VAT Second State Finance Ministers Committee met in 1998
Retailer
Consumer
Process of Reforms
The Four stages of Reforms
Back
ground work for VAT. of Central and State VAT- A Dual VAT service tax.
Introduction
system.
Integration of Reforms Reforms
Implementation on April 1, 2005 Applicability - Virtually universal Tax on intra-state transaction of goods Mode - Set off Tax on inputs to be set-off against tax on final products Taxes abolished Turnover tax, Re-sale tax, Surcharge, Special Additional Tax etc. Entry Tax Already imposed by States - to be made Vatable Entry tax in lieu of Octroi - not Vatable Central Sales Tax To be continued in the first year Position to be reviewed after a year
not levied on
No
No
VAT for a year on items presently attracting AED (sugar, textile and tobacco)
The position to be reviewed
Credit
purchased on or after April 1, 2004 Documentary evidence for tax payment Credit available between July 1, 2005 and December 31, 2005
Incentives
Accrual
Application
VAT paid on inputs VAT paid on Capital Goods Sales Tax paid on Goods lying in stock Entry Tax (not in lieu of Octroi)
VAT payable on Finished Goods CST payable on Inter State Sales Refund in case of exports Refund of unutilised credit at the end of 2nd year
Input Tax Credit = (A+B) (C+D) Where A = ITC c/f from previous month / year B = ITC accrued during the month / year C = ITC reversed during the month / year D = ITC refunded during the month / year
VAT credit available in case of: Within State sales OR Intra-state sales VAT credit restricted on Inter State Stock Transfer Available in excess of 4% or CST rate applicable
VAT Credit not available in case of Inputs used in the manufacture of exempted goods Purchases for other than manufacture/re-sale Purchases made inter State/in-transit Purchases of goods of negative list j Delhi - Fuel in the form of Petrol, Diesel and Kerosene, LPG, CNG, Coal j AP - Fuel, Coal and Natural Gas used for power generation j Jharkhand - Consumables j Tripura Credit available in excess of 4% on petroleum products (other than petrol, ATF and diesel) and other fuels
Input tax credit shall be claimed only on the basis of original purchase invoice issued by registered selling dealer.