Implementation of VAT satisfactory MOS, Finance
The Minister of State in the Finance Ministry told the Rajya Sabha,
The experience with implementation of VAT has been very encouraging so far. The new system has been received well by all the stakeholders. The introduction of VAT has helped in putting in place a uniform and transparent system of taxation across the States. The fact that more and more States are joining VAT shows that the system is stabilising and succeeding.
It is seen from the provisional tax revenue data furnished by States/ UTs that during 2005-06, the tax revenue of 25 VAT implementing States/ UTs registered a growth rate of about 13.8% as compared to 2004-05, which was higher than the Compound Annual Growth Rate ( CAGR ) of Sales Tax revenues of these States/ UTs for last 5 years upto 2004-05. Further, during first 7 months of the year 2006-07 (April-October), the tax revenue of 30 VAT implementing States/ UTs has registered a growth rate of 26.1% over the corresponding period of the previous year.
States/ UT, namely, Uttar Pradesh, Tamil Nadu and Puducherry are yet to implement VAT. The Government of Tamil Nadu has decided to implement VAT w.e.f . 01.01.2007. The Government of Puducherry has informed that it proposes to implement VAT w.e.f . 01.04.2007. The Government of Uttar Pradesh has yet not taken a decision regarding implementation of VAT.