Finance Minister P Chidambaram congratulated the UP government for introducing VAT and “wish them success.”

Roll out of Value Added Tax (VAT) in the country became complete, with Uttar Pradesh adopting the new tax system that has made 91 items including kerosene, milk and medicines cheaper on account of reduced rate of levy.

VAT, which replaces the existing sales tax, was introduced in April 2005. While a majority of the states switched to VAT, some states held out. They have all since adopted VAT.

“Keeping in view the needs of the common man, tax rate on 91 items like kerosene, milk and medicines have been reduced under the VAT,” Uttar Pradesh Chief Minister Mayawati told reporters here.

The Chief Minister expressed confidence that with the introduction of VAT and aligning the state’s tax structure on par with others, illegal transportation of goods will be curbed and all sections of people would benefit.

‘Chikan’ clothes, baranasi sarees and handloom items have been exempted from VAT, besides all varieties of seeds and agriculture equipments. Tax rate has also been reduced on chemical fertilizers, insecticides, pesticides, water pumps, tractors and tractor-trolleys and items used in information technology.

Sources : http://www.economictimes.indiatimes.com/