Opinion - Letters to the Editor   

VAT and revenue

Sir, — The spirit behind VAT anywhere is to make all transactions accountable. VAT can indirectly help the common man. Its reach goes far beyond sales tax. Sales tax evaded every year in Delhi city alone is Rs. 4,000 crores. On a country-wide basis it could be around Rs. 70,000 crores, twice the estimates of annual corruption in India. Thus, unaccounted business transactions could be 30 per cent of the revised estimate of India's GDP. VAT could significantly plug this revenue leakage and increase revenue. Indirectly it could contribute to bringing down the rate of taxation itself.

N. Narasimhan,
Bangalore

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