VAT for Indian economy
More than around 60 countries which switched out VAT and neighboring countries like Sri Lanka, and Bangladesh have also introduced VAT and hence the finance minister is very keen to introduce VAT in India so as to bringing about the much awaited tax reform in Indian taxation system .
In fact various committees were appointed from time to time and latest committee being Chelliah committees. this committee has strongly recommended for switch over to VAT in stages and the relevant portion of Chelliah committee are annexed to his chapter for the benefit of readers to understand background of the scheme and to be prepared for acceptance of the same in the near future .
The very first hurdle to be across while introducing the VAT is to carry out amendment to constitution so as to ensued that state government are compensated for the sales tax portion of the tax involved in the proposed VAT .
In fact as can be seen from the recommendations of chelliah committee it is proposed to introduce VAT in stages as well as introduction of VAT at central level and state levels.
It is an anticipated fact that if you have to march forward and remain in the race with other countries VAT is certainly the right solution. It is sincerely hoped that the system will come out to the surface on the experimental basis so that the practical difficulties if any can be sorted out.
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