Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: VAT Audit :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: list of goods taxed at 4% :: TAX RATES - GOODS TAXABLE @ 4% :: Central Excise rule to resale the machines to a new company :: ARTICLES ON INPUT TAX CREDIT IN VAT :: empanelment :: cpt :: VAT RATES :: ACCOUNTING STANDARDS :: ACCOUNTING STANDARD :: due date for vat payment :: form 3cd :: TDS :: articles on VAT and GST in India
« Auditing »
 Time Limit For Completion Of Assessment From The Date Of Special Auditor’s Report Under Income Tax Act, 1961
 Provisioning pertaining to Fraud Accounts
 Tax Audit Report (TAR) Certain exceptions and increased limits according to number of partners and considering nature of activity are desirable
 Cost Auditing Standards [ Cost Audit Documentation (102)] – Part-II
 Conference on Companies Act gets under way
 New bureau to dissolve state-run banks' power to choose auditors
 Foreign Exchange Management (Permissible Capital Account Transactions) (Fourth Amendment) Regulations, 2015
 ICAI forms 'prima facie' view on NSEL auditor
 Firms appoint new auditors in shift to meet new standards
 Cadre restructuring in I-T dept may open scrutiny of closed cases
 RBI issues new guidelines on concurrent auditing at branches

CAG cautions govt on 'teething problems' in GST
July, 27th 2010

The much-touted VAT, considered as the precursor to the proposed goods and services tax (GST), resulted in a loss of revenue for 10 states, and many manufacturers did not pass benefits arising out of low taxes to customers, the country's apex auditor the Comptroller and Auditor General of India (CAG) said today.

CAG said this while warning the government about some teething problems in the proposed GST.

CAG also pointed at the lack of preparedness for the common I-T system, which would enable the rollout of the GST.

In a study titled 'Implementation of VAT in India: Lessons for transition to GST', the CAG pulled up the Central government for not monitoring the progress made by respective state governments following the implemention of VAT.

It said that absence of monitoring led to manufacturers not passing the benefits of tax rate reduction to the common man.

"13 manufacturers did not reduce the maximum retail price of goods, despite a sharp decline in the rate of tax. Consequently, the benefit of Rs 40 crore was illegally retained by these maufacturers in the VAT chain instead of being passed on to consumers," the CAG said.

The study, covering 23 states, found that 10 states registered a dip in average revenue during the post-VAT regime, as compared to the pre-VAT period.

Recently, Finance Minister Pranab Mukherjee had expressed hope that GST would lead to higher revenue for states. In case of revenue loss, he assured full compensation to states.

Pointing that "loose ends across the VAT system have created a situation rife with opportunities for tax evasion in the states", the CAG said that one out of every two dealers had tried to evade tax.

"...As the departments detected 56,000 cases of evasion, out of 1 lakh dealers taken up for tax audits and additional demands totalling Rs 783 crore was raised," it said.

Pointing to the nascent I-T structure, CAG said, "We found that automation was in a nascent stage across all states, except Kerala."

The CAG said that if the VAT structure was implemented successfully, it could have led to a smooth GST regime.

"It was known that VAT will eventually lead to GST and a common software developed on a common platform across the states would be a precursor for this shift," the study said.

Recently, UIDAI Chairman Nandan Nilekani had made a presentation on I-T infrastructure before the empowered committee of state finance ministers on GST.

The government proposes to implement GST -- which will subsume excise, service tax and VAT -- from April 1, 2011. As per the Centre's proposal, goods will be taxed at 20 per cent and 12 per cent while 16 per cent tax will be levied on services.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Our Experience

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions