(a) whether it is mandatory for dealers with turnover of over Rs. 5 lakh to register themselves;
(b) if so, the details thereof;
(c) the criteria for registration of dealers under VAT;
(d) the names of the items that will be kept outside VAT; and
(e) the steps taken by the Government so that the prices of goods may not increase after the implementation of VAT in the country?
MINISTER OF STATE IN THE MINISTRY OF FINANCE(SHRI S.S. PALANIMANICKAM)
(a), (b) and (c): VAT is a State level tax reform measure.
As per the decision of the Empowered Committee of State
Finance Ministers, registration of dealers with gross
annual turnover above Rs.5 lakh will be compulsory under
the Value Added Tax (VAT) regime. There will be provisions
for voluntary registration also. All existing dealers will
be automatically registered under VAT Act. A new dealer will
be allowed 30 days time from the date of liability to get
registered.
(d): The goods which will be outside VAT will be liquor,
lottery tickets, petrol, diesel, Aviation Turbine Fuel
and other motor spirits.
(e): Under the VAT regime, cascading of taxes is eliminated
by providing input tax credit leading to less tax burden,
which means VAT should not lead to increase in prices.
This is also corroborated by the international experience.
Moreover, the Empowered Committee of State Finance Ministers
has also decided that after the introduction of VAT, each
State should set up a VAT Cell, inter-alia, to monitor price
movements of goods.