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.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

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

Keywords

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