VAT-ready States Are Mfg States, Reveals Study

New Delhi, May 9: | Updated: May 10 2003, 05:30am hrs
A study by PHD Chamber of Commerce of India (Phdcci) shows that out of the 11 States who have agreed to implement the VAT regime from June 1, 2003 most of them are manufacturing/exporting states. These are Maharashtra, Gujarat, West Bengal, Madhya Pradesh, Andhra Pradesh, Karnataka, Tamil Nadu, Kerala, Assam and Meghalaya.

Along with Haryana, these states account for over two-thirds of the countrys total trade and industrial production according to the chamber, and expected to benefit most from VAT. While states like UP, Jammu & Kashmir and those in the North-East are not in a position to implement VAT due to lack of preparedness, states going to polls including Delhi and Rajasthan would not like to disturb the status-quo according to the chamber.

The chamber feels that since no industry can procure all its input material from within the state where it is located, the Central Sales Tax (CST) paid on inputs sourced across state borders should be allowed to be set-off or abolished altogether. Denial of the same could affect the free flow of goods as it discriminates dealers of one state with that of another.