Caselet Code : CLSDM014
Publication date : 2005
Subject : Sales and Distribution Management
Industry : Business Environment
Length :
 4 Pages
Price :  Rs. 100 (Detailed Pricing Info)

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Abstract

The implementation of Value Added Tax (VAT) in India has been postponed several times. However, it was partially implemented on April 1, 2005 amidst strident opposition from traders. The caselet briefly presents the concept of VAT, discusses some issues related to VAT, and its effect on consumers. It also discusses what VAT has in store for traders and brings out reasons for their opposition to it.

Issues:

» Impact of VAT on sales
» Need to reform traditional tax regime
» Hurdles in implementing new reforms

 
Key words:

VAT, State Level Tax, Two-Tier, Cascading Effect, Consumer, Traders, Drugs, Consumer Durables, Confederation of Indian Industries (CII).

Questions for Discussion:

1. VAT is aimed at removing a number of indirect taxes and establishing uniformity. Discuss how implementing VAT will impact various sectors in India. Also, briefly discuss the impact of VAT on consumers.

2. Post budget, traders resorted to strikes, shutting down shops all over the country protesting against the introduction of VAT. Explain how VAT affects traders. Do you agree with the traders who oppose VAT? Justify your answer.