3-day Vat bandh from tomorrow

New Delhi, Kolkata, March 28 | Updated: Mar 29 2005, 05:30am hrs
Traders in about 20 states, which are going ahead with value added tax (Vat), will go on a three-day strike from Wednesday in protest against the implementation of the new tax system.

However, traders in those states which have opted against Vat, will not participate in the strike. They will stage only symbolic protest to show solidarity with traders in the states which are implementing Vat.

Most of the states have decided to implement Vat from April 1 as has been decided by the empowered committee of state finance ministers. States ruled by the National Democratic Alliance (NDA) have decided not to stay out of it.

According to secretary general of the Confederation of All India Traders Praveen Khandelwal, we are going ahead with the protest as the state governments are implementing Vat without adequate preparation. Vat implementation will cause avoidable hardship to traders.

As far as Delhi is concerned, he said, we are not yet aware of Vat rules though only three days are left for implementation of the new tax regime. In many other states, he added, the state governments were going ahead with implementation without informing the traders about the operational aspects of the new taxation system. Even traders are finding it extremely difficult to comprehend the advertisements regarding Vat being issued by the Delhi government, he said.

In Kolkata, Mahesh Singhania, chairman (publicity and public relation) of the Federation of West Bengal Trade Association described Vat as an act to vanish all traders.

The trade bandh will affect the functioning of malls as well as the local kirana shops, he said.

The government did not eliminate several other taxes like consumption tax, entry tax, CST and Octroi. This is against the norms being followed by 130 countries where Vat has been implemented, he added.

Traders are against the governments contention that Vat will simplify the tax structure, lower the price of the commodities and would help in reducing the tax evasion and grey market activities.

According to them, Vat will increase the price of goods in the state by 25-30%.

State governemnts, however, are gearing up to replace existing sales tax with Vat. Traders are being provided tax information number (TIN).

They will be required to declare their inventories of stock as on April 1. They will get set off for tax paid on stocks acquired between April 1, 2004 and March 31, 2005.