UP gears up for VAT

The Trade Tax department of Uttar Pradesh is prepared to implement value-added tax (VAT) in the state. The VAT draft has been finalised and will be sent to the Centre for approval by early next month.

This was stated by Sunil Kumar, commissioner (trade tax), Uttar Pradesh, in a workshop organised by PHDCCI on 'preparation for VAT in UP' in Lucknow.

The department has also put the draft on its website and has invited suggestions from people.

"We have received about 800 suggestions from different sectors of the industry on the material posted on our website," informed Kumar.

He further added that the department, in its process to resolve all queries regarding the new tax, has formed a pool of over 400 frequently asked questions (FAQs) to be posted on the department's website.

Uttar Pradesh is in the process of adopting the new tax regime. Until recently, UP was the only state that had not adopted VAT. But after chief minister Mayawati's nod for VAT implementation, the state machinery is all geared to implement it.

"Though UP is the last state to adopt VAT, yet it is not at a loss. It has the benefit of gaining from the experience that the other states have had in its implementation in their respective states. UP can learn from the problems faced by them and can avoid its replication here," explained R Muralidharan, associate director, PriceWaterhouseCoopers (PWC).

Speaking on the occasion, Ram Poddar, chairman, indirect tax committee, PHDCCI, highlighted the fears and concerns that is bound to be present with the introduction of the new tax regime amongst the trading community, especially the small traders in regard to either the tax burden going up or possible hassles in the compliance of the law.

"We request the state government to run an effective information campaign to solve this problem," he added.

The chamber also emphasised that there should be only one and single state tax in form of VAT and that no other taxes be levied by the government in addition to it.