India’s Transition from State Level Sales Tax to Value Added Tax (VAT)

2014 ◽  
Vol 1 (1) ◽  
Author(s):  
Vandana Jain
Keyword(s):  
Value Added ◽  
State Level ◽  
Sales Tax ◽  
Tax Revenue ◽  
Tax Rates ◽  
Value Added Tax ◽  
Commodity Taxation ◽  
Tax Reforms ◽  
Tax Regimes ◽  
Phase Out

An outstanding development in the sphere of State finances since Independence has been the precipitous growth in the relative revenue significance of sales tax levied under entry 54 of List II in the Seventh Schedule of the Constitution. It has grown considerably in depth and coverage, and forms the mainstay of States. tax revenue. Prior to tax reforms initiated in early 1990s, sales tax was characterised by a multiplicity of tax rates and exemptions, lack of uniformity across States, large number of exemptions and concessions, and differing procedures for tax collection. In mid-1990s, most states had agreed to phase out the incentive-related exemptions and implement floor rates of sales tax. As part of the nation-wide efforts to redesign commodity taxation and the implementation of CENVAT at the level of the Centre, many States have modified their sales tax regimes to launch a state level VAT under the scheme prepared by the Empowered Committee for this purpose. This paper explains and examines various problems associated with sales tax and its switch over to Value Added Tax (VAT) in recent years.

scholarly journals Tax Revenue, Tax Reform and Government Expenditure: The Case of Nigerian Economy (1994 – 2017)

2020 ◽  
pp. 1-12
Author(s):  
Chinedu Jonathan Ndubuisi ◽  
Onyekachi Louis Ezeokwelume ◽  
Ruth Onyinyechi Maduka
Keyword(s):  
Income Tax ◽  
Tax Reform ◽  
Government Expenditure ◽  
Value Added ◽  
Series Data ◽  
Tax Revenue ◽  
Value Added Tax ◽  
Tax Reforms ◽  
Level Of Significance ◽  
Excise Duties

The objective of this study is to empirically investigate the effect of tax revenue and years tax reforms on government expenditure in Nigerian. Tax revenue were explained using custom and excise duties, company income tax, value-added tax and tax reforms explained by the years in which reforms took place measured by dummy variables as proxies. In conducting this research, an annual time series data from central bank statistical bulletins and Federal Inland revenue Service of Nigeria spanning from 1994-2017 were employed. The data were tested for stationarity using the Augmented Dicker-Fuller Unit Root Test and found stationary at first difference. The Johansen co-integration test was also conducted and showed that the variables are co-integrated at the 5% level, which implied that there is a long-run relationship between the variables in the model. The presence of co-integration spurred the use of vector error correction model and VEC granger causality to determine the effects and decision for the study objective. Findings revealed that Customs and Excise Duties has positive (3.96) and significant (-8.38) impact on government expenditure at 5% level of significance (t=8.38>1.96), Company Income Tax has negative (-1.25) and significant (2.98) impact on government expenditure at 5% level of significance (t=2.98>1.96), Value added tax has positive (8.54) and significant (3.90) impact on government expenditure at 5% level of significance (t=3.90>1.96) and Tax reforms periods has negative(-3.52E+12) and significant (8.39) impact on government expenditure at 5% level of significance (t=8.39>1.96). The study thus concluded that tax revenue and tax reforms significantly affect the Nigerian economy with the direction of causation running from government revenue to government expenditure, supporting the revenue-spend or tax-spend hypothesis.  It was recommended while seeking to increase its revenue base via tax should also increase their expenditure profile to create a balance with the tax revenue and every other tax reform should be geared towards this balance.

Trends in Collection of Value Added Tax in West Bengal: A Commentary

2016 ◽  
Vol 5 (2) ◽  
pp. 238-248
Author(s):  
H. K. Dwivedi ◽  
Sudip Kumar Sinha
Keyword(s):  
State Government ◽  
West Bengal ◽  
Value Added ◽  
Jel Classification ◽  
Sales Tax ◽  
Tax Revenue ◽  
Value Added Tax ◽  
Tax Base ◽  
Explanatory Variables ◽  
National Economic

As per constitutional provisions of Indian federal finance, value added tax (VAT) (and sales tax) is the main source of revenue for the state government. Value added tax (including sales tax) collected by the Directorate of Commercial Taxes, West Bengal, accounts for approximately 62 per cent of state’s own tax revenue (SOTR). Studies on collection of taxes suggest that revenue from all taxes not only depends directly on the nature and growth of the tax base but depends also on other factors such as economic reforms, global and national economic condition and tax effort of the tax collecting department. The motivation of this article is to try to analyze the nature of the trends in collection of VAT in West Bengal during recent years and to find out the effect of different explanatory variables on collection of VAT. JEL Classification: H26, H71, H3

ESTIMASI ELASTISITAS DAN BUOYANCY PAJAK PERTAMBAHAN NILAI (PPN) DI INDONESIA

INFO ARTHA ◽  
2017 ◽  
Vol 3 ◽  
pp. 170-191
Author(s):  
NFN Nurhidayati
Keyword(s):  
Value Added ◽  
Sales Tax ◽  
Tax Revenue ◽  
Public Expenditures ◽  
Tax Rates ◽  
Tax Base ◽  
Luxury Goods ◽  
State Revenue ◽  
The Government ◽  
Is Value

Tax revenue is the most important source of state revenue nowadays. One of the largest sources of tax revenue is Value Added Tax (VAT) and Sales Tax on Luxury Goods. Tax buoyancy and elasticity is a common measure employed to estimate tax revenue productivity. Concept of elasticity is used to determine the level of responsiveness of automatic (built-in) of tax revenue to the tax base. While the concept of buoyancy is useful to know responsiveness of tax revenue, both to the tax base and to changes in policy. By using the Divisia index during 1984 to 2012, this research specifies that the coefficients of buoyancy and elasticity are 0.99 and 0.82 respectively. It shows that the PPN / PPnBM (VAT and Sales Tax on Luxury Goods) relatively unitary buoyant, but less elastic to the tax base. While using the basis of sectoral GDP from 2005 to 2012, VAT revenues also inelastic with respect to the development of the tax base with a coefficient of 0.632 and a buoyant relative to GDP overall with a coefficient of 1.076. Inelastic tax system forces governments to continuously make discretionary changes, either in the tax bases or in the tax rates or both, in order to be able to keep up with increasing public expenditures. Moreover, the point elasticity indicates that manufacturing and mining sectors are fluctuating as the VAT key sector and the trade sector are relatively stable and buoyant. Therefore, the government needs to review the policies of both the base and the VAT structure, in particular for the manufacturing and the mining sector. 

scholarly journals Analysis of Tax Structure Performance and its Ratio in Indonesia

2021 ◽  
pp. 1-11
Author(s):  
Amri Amir ◽  
Adi Bhakti ◽  
. Junaidi ◽  
Syahmardi Yacob
Keyword(s):  
Income Tax ◽  
Value Added ◽  
Sales Tax ◽  
Tax Revenue ◽  
Tax Structure ◽  
Value Added Tax ◽  
Luxury Goods ◽  
Average Value ◽  
Tax Revenues ◽  
Tax Ratios

This study aims to determine and analyze fluctuations in tax revenues, tax structure, and factors that determine tax revenues and ratios in Indonesia. The data used are data on the structure, revenue, and tax ratios from 2001 to 2017. The results show that the tax structure in Indonesia was dominated by direct taxes (income tax and personal tax) with contributions >50% and progressive, while indirect tax contributions (Value-Added Tax, Sales Tax on Luxury Goods, etc.) are around 30%. The tax ratio is still low at 14.58 percent. The results also show that GDP influences tax revenue, while the value of exports and the number of taxpayers have no effect. The tax ratio in Indonesia is influenced by GDP and the value of exports, while the mandatory amount has no effect. From a sample of 150 SMEs in Jambi, it is known that the level of compliance, obedience, assessment of tax servants is considered very good (average value> 80). Taxpayers' confidence in the use of tax funds for the benefit of the state is still low at 40.27, and sanctions for non-negotiable tax violations are also low at 48.53.

Estimated impact of the GST on tobacco products in India

2018 ◽  
Vol 28 (5) ◽  
pp. 506-512 ◽  
Author(s):  
Rijo M John ◽  
Estelle Dauchy ◽  
Mark Goodchild
Keyword(s):  
National Level ◽  
Weighted Average ◽  
Value Added ◽  
State Level ◽  
Tax Revenue ◽  
Tax Rates ◽  
Tobacco Products ◽  
Goods And Services ◽  
Elasticity Of Demand ◽  
The Impact

ObjectiveTo examine the potential impact of the goods and services tax (GST) on price, consumption and tax revenue from tobacco products in India and across states.MethodsData on prices, tax rates and tax revenue are used to estimate a benchmark scenario prior to the GST implementation in 2017–2018. Using own-price elasticity of demand for tobacco products, we estimate the impact of GST at the state level and the aggregate state-wise impact to obtain the national level impact.FindingsWe predict that the statutory GST rate of 28% plus compensation cess will increase the price of cigarettes, bidi and smokeless tobacco by 0.18%, 8.8% and 6%, respectively, and, as a result, it will reduce the weighted average consumption by 0.3%, 10% and 6% and increase tax revenue by 0.17%, 35% and 4.7%, respectively. Most states will experience a fall in tax revenue from tobacco products by more than 50% compared with the value-added tax revenue they collected pre-GST. The GST compensation cess will have to be used to compensate states’ revenue shortfalls.ConclusionsThe GST has increased the complexity of the tax system for tobacco products. In particular, for cigarettes, the specific cess constitutes the majority of tax revenue, and therefore, it must be revised regularly to protect revenue and keep real prices from falling. In addition, India should reintroduce excise taxation on all tobacco products, at least in part, on top of the GST, to make them less affordable and to smooth the transition after the expiration of the compensation cess.

scholarly journals PROBLEMATIC ISSUES OF THE ADDED VALUE TAX

2018 ◽  
pp. 88-93
Author(s):  
N. A. Chumakova ◽  
Zh. A. Adamyan
Keyword(s):  
Financial Regulation ◽  
Value Added ◽  
State Level ◽  
Added Value ◽  
Sales Tax ◽  
Value Added Tax ◽  
Goods And Services ◽  
The Russian Federation ◽  
Economic Failure ◽  
First Time

The reform of the budgetary and administrative spheres of legislation at the present stage is inextricably linked with the direction taken at the state level to stabilize the economy in the country, as well as to stimulate its growth. Particularly important element of this phenomenon is taxes, which represent the main source of revenues in the country’s budget and financial system. Today in the sphere of economy and financial regulation there is a question of increase of taxes. The President of the Russian Federation has already signed a law, according to which from January 1, 2019 the VAT rate increases from 18 to 20%. At the same time, the existing VAT benefits in the form of an exemption from this tax, as well as the VAT rate of 0% and 10% remain. The reform of the law on VAT (in addition to the increase of budget revenues from tax amounts) intended to eliminate the economic failure of the application of VAT and simplification of VAT administration. It should be noted that the problems arising from the improvement of indirect taxation, in this case, affecting the value added tax, are currently relevant for Russia. Starting from 1992, when VAT was introduced in Russia for the first time, to the present day, there are clashes of opinions of the warring parties about the relevance of the value added tax. The problems affect the level of rates and the procedure for calculating tax liabilities, the volume and structure of benefits, the procedure for VAT collection in the movement of goods and services between foreign partners, as well as the probability of its replacement with sales tax or the establishment of a single VAT rate. And this is not the most complete list of problems arising from the reform of the value added tax.

scholarly journals Value Added Tax in Nepalese Context

NUTA Journal ◽  
2018 ◽  
Vol 5 (1-2) ◽  
pp. 87-94
Author(s):  
Dilnath Dangal
Keyword(s):  
Value Added ◽  
Secondary Data ◽  
Vital Role ◽  
Sales Tax ◽  
Fiscal Year ◽  
Tax Revenue ◽  
Total Revenue ◽  
Value Added Tax ◽  
Potential Yield ◽  
A Value

A value added tax (VAT) is a tax not on the total value of the commodity being sold, but on the value added by the last trader. Developing countries are engaging in the study of VAT more seriously as it is the source of tax revenue which has high tax potential yield among the existing tax systems. In this situation, this paper intended to assess practices of VAT and VAT administration as well as its contribution on GDP in Nepalese context. More so, the study collected secondary data which are analyzed based on descriptive/comparative methods. The study found that, sales tax has been replaced by VAT since 1997 in Nepal. Before that sales tax played a vital role to collect revenue and resources mobilization. Department of VAT and its field offices were/are responsible for administering VAT functions that was/is not yet attractive and efficient. However, data shows that collecting VAT is in increasing order. In Fiscal Year 2014/15 it came to NRs. 11516 crore which was 5.42 percent of GDP, 29.60 percent of total revenue and 48.14 percent of indirect tax revenue. And the contribution of VAT as percent of GDP remained at average of 4.04 percent during the study period (2002/2003 to 2014/2015).

scholarly journals Value Added Tax and Informality: Determinants of Registration of Enterprises under State VAT in India

2018 ◽  
Vol 13 (1) ◽  
pp. 21-48
Author(s):  
Sacchidananda Mukherjee ◽  
R. Kavita Rao
Keyword(s):  
Value Added ◽  
Jel Classification ◽  
The State ◽  
Sales Tax ◽  
Value Added Tax ◽  
Taxation System

Unincorporated enterprises often bypass formal regulations in general and taxation in particular. Bringing unincorporated enterprises under the taxation system is a challenge often faced by tax administrators, and it is in this regard that the present study explores the factors which influence the decision of unincorporated enterprises to register with the state value added tax (VAT)/sales tax authority across states in India. This analysis is limited to the decision regarding registration. It is not necessary that enterprises that are registered pay taxes and/or file returns—however, the process of registration does provide some information to the tax department for follow ups. The study throws up some interesting results for policymakers and tax administrators. JEL Classification: H25, H32, H26, L53

scholarly journals ANALISIS PENERAPAN PEMUNGUTAN PAJAK PERTAMBAHAN NILAI PADA BUMN SEBAGAI PEMUNGUT DAN TIDAK SEBAGAI PEMUNGUT PAJAK PERTAMBAHAN NILAI (STUDI KASUS PADA PT PELABUHAN INDONESIA III Cabang Benoa)

2018 ◽  
Vol 1 (2) ◽  
Author(s):  
Agista Ayu Aksari
Keyword(s):  
Data Analysis ◽  
Value Added ◽  
The State ◽  
Assessment System ◽  
Sales Tax ◽  
Value Added Tax ◽  
Self Assessment ◽  
A Value ◽  
The Difference

On 1st July 2012 SOE (State-Owned Enterprises)become the Value Added Tax (VAT) collector. According to the regulation of the Ministher of Finance No.85/PMK.03/2012 about the appointment of the State Owned Enterprises to collect, deposit and reporting Value Added Tax (VAT) and Sales Tax on Luxurious Goods, and precedures for collecting, depositing and reporting. The purpose of this research is to determine the difference between SOE as a Value Added Tax collector and not as a Value Added Tax collector.The object of this research is PT Pelabuhan Indonesia III cabang Benoa. The data analysis in this research is to analyze the calculation and reportig of VAT before being VAT collector and when it became VAT collector.The result of this research it is known that are the application of the value added tax on PT Pelabuhan Indonesia III Cabang Benoa before becoming tax collector is charged directly by fiskus and has official assessment system and as a PT Pelabuhan Indonesia III Cabang Benoa has a self assessment system whereby PT Pelabuahan Indonesia III Cabang Benoa became ILL wapu. Differnce in PT Pelabuhan Indonesia III Cabang Benoa as a collector, and the collector Is a time before becoming a collector has aself just my assessment system whereas before becoming a collector has official assessment system. Tax eceipt when it became a collector of VAT using duplicate counts 3 before becoming a collector only uses 2 of the double. For SSp before becoming a duplicate while using 4 collector as a collector to use duplicate. DOI 10.5281/zenodo.1214932

scholarly journals Gst impact on the e-commerce sector: an overview

2017 ◽  
Vol 7 (2) ◽  
pp. 245-249
Author(s):  
VIJAYA KUMAR K ◽  
JABIMOL C. MAITHEEN
Keyword(s):  
Value Added ◽  
Retail Sector ◽  
Tax Rates ◽  
Value Added Tax ◽  
Indian Government ◽  
Tax Base ◽  
Indian Economy ◽  
A Value ◽  
The Government ◽  
Retail Entrepreneurs

The success of the e-commerce sector is largely dependent on the increasingnumber of retail entrepreneurs, who fall in the unorganized retail sector category. Thegovernment has included such players in the ambit of GST with an intention of broadeningthe tax base and has introduced specific provisions for the e-commerce companies. This isone of the major taxation reforms in Indian taxation system.GST is to set to integrate all stateeconomies and increase the overall growth of the country.GST will create unified market andboost the Indian economy. The Goods and Service Tax (GST) is a value added tax to beimplemented in India.. There are 3 kinds of taxes under GST: 1) SGST 2) CGST 3) IGST.The GST tax rates are divided into 5 categories which are 0%, 5%, 12%, 18%, 20%.Implementation of GST is one of the best decision taken by the Indian Government. Thesuccess of the e-commerce sector is largely dependent on the increasing number of retailentrepreneurs, who fall in the unorganized retail sector category. The government hasintroduced such players in the ambit of GST with the intension of broadening the tax baseand has introduced specific provisions for the e-commerce companies. This paper focuses onthe concept of GST and their impact on E-Commerce

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