Accounting for India's Forest Wealth - Madras School of Economics

More documents

Recommendations

Info

commodities, common for all the States, will fall under the general VATrate of 12.5 percent.It was proposed that VAT on AED items relating to sugar, textileand tobacco, because of initial organizational difficulties, will not beimposed for one year after the introduction of VAT and till then theexisting arrangement will continue.Expanding the Tax Base: Service TaxThe service tax was levied for the first time in 1994-95 budget. Sincethen its rate has been progressively increased and the number ofservices under the service tax net has also been increased year after year(Table 1).Table 1: Taxation of ServicesService Tax was introduced from 1st July 1994UnionBudgetNumber ofServicesIntroducedCumulativeNumber ofServicesUnionBudgetNumber ofServicesIntroducedCumulativeNumber ofServices1994-95 3 3 2004-05 7 651996-97 3 6 2005-06 15 801997-98 9 15 2006-07 12 921998-99 11 26 2007-08 6 982001-02 15 41 2008-09 4 1022002-03 10 51 2009-10 4 1062003-04 7 58 2010-11 8 114Source (Basic Data): Union Budgets, various years.Reducing the Tax Rate: Lowering Dependence on Indirect TaxesReducing the tax rates as well as the number of rate categories was akey objective of the reform. In the case of CENVAT, most of the productsused to attract excise duties at the rate of 14 percent until recently. Asper an announcement in December 2008, the core Cenvat rate has beenbrought down to 10 percent. Some products also attract special exciseduty/and an additional duty of excise at the rate of 8 percent above the12
Cenvat rate. In addition, there is a 2 percent education and 1 percenthigher education cess applicable on the aggregate of the duties of excise.Excise duty is levied on ad valorem basis or based on the maximum retailprice in some casesIn 2005, the core Cenvat rate was kept at 16 percent for amajority of the items. There were two more rates: a demerit rate of 24percent and a concessional rate of 8 percent. Effectively, there wereseveral other rates of excise duty that continue to be applied on differentitems, subject to their end-use. With the 2008-09 budget, the coreCenvat rate was brought down to 14 percent. This has now been broughtdown to 10 percent. The adoption of the statevat also led torationalization and some reduction in the tax rates. The rate of thecentral sales tax was also gradually brought down.Chart 1: Share of Indirect Taxes in Total Tax Revenues90.085.080.075.070.065.060.055.050.01950-511953-541956-571959-601962-631965-661968-691971-721974-751977-781980-811983-841986-871989-901992-93Share of indirect taxes in total tax revenue131995-961998-992001-022004-052007-08
Page 6: with mobile firms, Wellisch (1995)
Page 12 and 13: With a reasonable change in the rel
Page 14 and 15: of state VAT, most states had agree
Page 18 and 19: Reduction of indirect tax rates led
Page 20 and 21: 4. THE GST: THREE VERSIONSThe basic
Page 22 and 23: Table 2: Central and State Taxes to
Page 24 and 25: Table 3: Mechanism of handling Inte
Page 26 and 27: i. All public services of Governmen
Page 28 and 29: tobacco products. Following the con
Page 30 and 31: electricity duty levied by the Stat
Page 32 and 33: Any amount collected through these
Page 34 and 35: Table 7: Impact of the Green Shift
Page 36 and 37: happened with the relatively high o
Page 38 and 39: Table 8 indicates that many of the
Page 40 and 41: tonne on domestically produced and
Page 42 and 43: State Finance Ministers, The Task F
Page 44 and 45: GoI (2005), A White Paper on State-
Page 46 and 47: Appendix Table A1: Revenue Importan
Page 48 and 49: MSE Monographs* Monograph 1/2006A T

Accounting for India's Forest Wealth - Madras School of Economics

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?