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Manipur government hikes Value Added Tax
IMphal, Dec 17:
Published on 17 Dec. 2010 11:32 PM IST
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Manipur government on Friday increased VAT by one percent. The notification was issued by the Manipur finance department a day after a cabinet meeting was held chaired by CM O Ibobi approved the proposal.
The government amended the Manipur value added tax act of 2004 and increased the VAT rate from 4% to 5% and 12.5 % to 13.5 % on the categories of items as prescribed in the schedule I.
A circular said that any objection, suggestion, view and comment may be submitted in writing at the office of Commissioner of Taxes, Manipur within 14 days.
With a view to drawing maximum benefits from economic inter-dependence and of common market for goods and services, The government converted the then sales tax system into value added tax system. By implementation the VAT in Manipur since July 2005, there has been a mark increased in the collection of revenue through sale tax as compared post VAT period, a tax official said.
From the year 2005-06, there was a rise of 17.26% in the collection of government tax and consequently the next sales tax in the year 2006-07 set a target of `7,280 lakh, however the department could collect only `4,354 lakh. The amount was only 59.80% of the targeted achievement. A government official said that the value added tax is a new system of taxation which replaced the Manipur sales tax act of 1990 and the difference between the VAT and sales tax lies in the methods used to collect the tax.
Under the sales tax system, the tax amount is collected on behalf of revenue mainly at the point of sale to the final user while under the VAT system incremental tax is collected at each stage of production and distribution, he stated.

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