VAT not to affect trade, says Walia

NEW DELHI, MARCH 24. Accusing the Bharatiya Janata Party of opposing introduction of the Value Added Tax (VAT) regime for political reasons, the Delhi Finance Minister, A. K. Walia, today asserted that trade would not be affected by the new taxation system and it would not lead to any drastic changes in Delhi's character as a major trading centre.

Replying to a question raised by Ramvir Singh Bidhuri (Nationalist Congress Party) in the Delhi Assembly, the Finance Minister said a wrong impression was sought to be created that traders would be badly affected by the introduction of VAT. He said VAT was one of the most taxpayer-friendly systems and had been initiated by none else than the previous NDA Government led by the BJP. "It is just for political reasons now that the BJP is opposing VAT. The Leader of the Opposition in the Delhi Assembly, Jagdish Mukhi, had even visited some countries abroad during his tenure as the Finance Minister to assess the whole system and had at that point of time favoured it strongly."

Acknowledging that some items could become expensive due to the introduction of the new regime, Dr. Walia said there was always scope for improvisation. He said the Finance Ministers of 21 States had agreed to the introduction of VAT regime and only the BJP-ruled States and some other Governments were opposing it. He pleaded that the BJP should rise above petty political considerations and work for the smooth implementation of the new system that would lead to check on evasion of taxes and strengthen the accounting as well as audit system of trade and industry.

Stating that Central Sales Tax (CST) was there to stay for the present, Dr. Walia said that the Central Government had promised that CST would be phased out gradually as it contributed a huge sum of revenue to the government coffers.

Dr. Walia said the best feature of VAT was that it introduced the concept of self-assessment for traders and they were their own masters. The interactions between the Department and the traders would come down drastically and thereby lead to better transparency and reduce the scope of corruption. On the other hand, he said, all the problems of traders with regard to implementation of the new system would be resolved without any delay and the Department would go out of the way to help them in understanding the situation. Already preliminary discussions on the different aspects of VAT and its rules had been held with various traders associations and business chambers to make them understand the new concept.

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