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Proposal to levy VAT on local supplies of EOUs
10 May '10
1 min read
The Revenue Advisory Council (RAC) is examining a proposal to levy value-added tax (VAT) at a marginal rate of 2.5 percent on local supplies made by export-oriented units of five sectors; textiles, carpets, leather, sports goods and surgical instruments.
In a meeting to discuss the above issue, there were heated debates between the experts who were in favour of charging the levy and those who were against the same. But, tax authorities have still not responded positively to the proposal.
Experts in favour of the levy, argued by saying that, there is no concept of zero-rating on the local supplies in any of the countries across the world, so, zero-rating should only be limited to exports and local supplies be subjected to VAT.
In a meeting to discuss the above issue, there were heated debates between the experts who were in favour of charging the levy and those who were against the same. But, tax authorities have still not responded positively to the proposal.
Experts in favour of the levy, argued by saying that, there is no concept of zero-rating on the local supplies in any of the countries across the world, so, zero-rating should only be limited to exports and local supplies be subjected to VAT.
Fibre2fashion News Desk - India
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