Sharma, Chanchal Kumar (2004): Implementing VAT in India :Implications for Federal Polity. Published in: The Indian Journal of Political Science , Vol. Vol (L, No. No (4) (December 2005): pp. 915-934.
Preview |
PDF
MPRA_paper_206.pdf Download (145kB) | Preview |
Abstract
Over the last few years, many attempts have been made to implement VAT in India. Initially, all states were to move to VAT system by 2000, but administrative problems and concern over the revenue implications of the change delayed the scheduled implementation. It has been postponed for five times in past five years. In fact, introduction of a full fledged VAT in India seem to present numerous administrative and constitutional difficulties, including the vexed question of union-state relations. In addition to this, implementing VAT in India in context of economic reforms has paradoxical dimensions. On one hand economic reforms have led to more decentralization of expenditure responsibilities which in turn demands more decentralization of revenue raising powers if fiscal accountability is to be maintained. But on the other hand the process of implementation of VAT can lead not only to revenue loss for the states but can also steal away the states’ autonomy indicating more centralization. Thus the need is to develop such a ‘federal friendly model’ of VAT (along with a suitable compensation package) that can be implemented in India without compromising federal principles.
Item Type: | MPRA Paper |
---|---|
Original Title: | Implementing VAT in India :Implications for Federal Polity |
Language: | English |
Keywords: | VAT; India; Federal Polity; subnational vat; national vat; dual vat |
Subjects: | Z - Other Special Topics > Z0 - General H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H29 - Other H - Public Economics > H0 - General |
Item ID: | 206 |
Depositing User: | Chanchal Kumar Sharma |
Date Deposited: | 07 Oct 2006 |
Last Modified: | 28 Sep 2019 21:18 |
References: | • Ahmed, Ehtisham and Nicholas Stern, 1991. The Theory and Practice of Tax Reform in Developing Countries (Cambridge University Press). • Baer, K., V. P. Summers, and E.M. Sunley (1996) "A Destination VAT for CIS Trade," MOCT- MOST, Economic Policy in Transitional Countries, 6: 87-106. • Bagchi, A. (1996) "Harmonizing Sales Taxes in a Federation - Case Studies: India and Canada," Working Paper No. 9, National Institute for Public Finance and Policy, New Delhi. • Bagchi, A. (1997) "Tax Assignment in the Indian Federation: A Critique," National Institute for Public Finance and Policy, New Delhi. • Bird, R.M. (1999) “Tax Policy and Tax Administration in Transitional Countries,” in G. Lindencrona, S-O Lodin, and B. Wiman, eds., International Studies in Taxation: Law and Economics (London: Kluwer Law International). • Bird, R.M. (2000) “Subnational Taxes: Potentials and Problems,” in S.J. Burki and G.Perry, eds., Decentralization and Accountability of the Public Sector, Annual WorldBank Conference on Development in Latin America and the Caribbean 1999(Washington: World Bank). • Bird, R. M. and P.-P. Gendron (1998) “Dual VATs and Cross-border Trade: Two Problems, One Solution?” International Tax and Public Finance, 5: 429-42. • Bird, R.M. and P.-P. Gendron (2000) “CVAT, VIVAT and Dual VAT; Vertical ‘Sharing’ and Interstate Trade,” International Tax and Public Finance, 7: 753-61. • Bovenberg, L. (1994)"Destination- and Origin-Based Taxation Under International Capital Mobility," International Tax and Public Finance, 1: 247-73. • Breton, A. (1996) Competitive Governments (Cambridge: Cambridge University Press). • Cnossen, S. and C. Shoup (1987) "Coordination of Value-Added Taxes," in S. Cnossen, ed., Tax Coordination in the European Community (Deventer: Kluwer).36 • Genser, B. (1996) “A Generalized Equivalence Property of Mixed International VAT Regimes,” Scandinavian Journal of Economics, 98: 253-62 • Ip, I. and J. Mintz (1992) Dividing the Spoils: The Federal-Provincial Allocation of Taxing Powers (Toronto: C.D. Howe Institute). • Joshi, V. and I. Little (1996), India's Economic Reforms 1991-2001, Oxford: Clarendon Press. • Keen, M. and S. Smith (2000) “Viva VIVAT!” International Tax and Public Finance, 7: 741-51. • Keen, M. and S. Smith (1996) "The Future of Value-added Tax in the European Union," Economic Policy, 23: 375-411. • Lockwood, B., D. de Meza, and G. Myles (1994) “The Equivalence between the Destination and Non-reciprocal Restricted Origin Tax Regimes,” Scandinavian Journal of Economics,96: 311-28. • Lockwood, B., D. de Meza, and G. Myles (1995)"On the European Union VAT Proposals: The Superiority of Origin over Destination Taxation," Fiscal Studies, 16: 1-17. • López-Garcia, M. (1996)"The Origin Principle and the Welfare Gains from Indirect Tax Harmonization," International Tax and Public Finance, 3: 83-93. • McLure, C.E. (1993) "The Brazilian Tax Assignment Problem: Ends, Means, and Constraints," in A Reforma Fiscal no Brasil (Sao Paulo: Fundaçäo Instituto de Pesquisas Econômicas). • McLure, C. E. (2000) “Implementing Subnational VATs on Internal Trade: The Compensating VAT (CVAT),” International Tax and Public Finance, 7: 723-40. • National Institute of Public Finance and Policy (1994) Reform of Domestic Trade Taxes in India: Issues and Options (New Delhi). • Neumark Report (1963) "Report of the Fiscal and Financial Committee," in The EEC Reports on Tax Harmonization (Amsterdam: International Bureau of FiscalDocumentation). • Norregard, John (1997) : ‘Tax Assignment’ in Teresa Ter-Minassian (ed), Fiscal Federalism in Thoery and Practice, International Monetary Fund, Washington , DC, pp 65-66. • Poddar, S. (1999) “Considerations in the Design of a VAT at the State Level in India,”Paper prepared for VAT Seminar for Senior Officials from the Centre and the States, July1999. • Rao, M.G. (2000): “Tax Reform in India: Achievements and Challenges” Asia Pecific development Journal Vol.7, No.2, December 2000, pp 59-74. • Serra, J. and J. Afonso (1999) “Fiscal Federalism Brazilian Style: Some Reflections,” Paper presented to Forum of Federations, Mont Tremblant, Canada, October 1999. • Shome, P. and B. Spahn (1996) "Brazil: Fiscal Federalism and Value Added Tax Reform," Working Paper No. 11, National Institute of Public Finance and Policy, New Delhi • Silvani, C. and P. dos Santos (1996) "Administrative Aspects of Brazil's Consumption Tax Reform," International VAT Monitor, 7: 123-32. • Tait, A.A. (1988) Value Added Tax: International Practice and Problems (Washington: International Monetary Fund). • Tax Reforms Committee (1992) Final Report-Part I (New Delhi; Ministry of Finance, Department of Revenue). • Varsano, R. (2000) “Subnational Taxation and Treatment of Interstate Trade in Brazil: Problems and a Proposed Solution,” in S.J. Burki and G. Perry, eds., Decentralization and Accountability of the Public Sector, Annual World Bank Conference on Development in Latin America and the Caribbean 1999 (Washington: The World Bank). |
URI: | https://mpra.ub.uni-muenchen.de/id/eprint/206 |