ANALYSIS OF IMPORTANT PROVISIONS OF CERTAIN STATE VAT ACTS 

One of the main drawbacks of the earlier Sales Tax regime was the lack of uniformity between States in the matter of definition of terms, requirement of registration, tax rates and exemption, basis of charge and a host of other factors.

To overcome this drawback in the VAT era, several steps were taken. The Empowered Committee of State Finance Ministers has had this as one of their cherished objectives and it was resolved to maintain uniformity with reference to atleast certain basic features. A model VAT bill was also drafted to enable states to adhere to this model.

The Empowered Committee has endeavored to ensure convergence in 22 different parameters, with the result that atleast in these 22 areas, the State enactments should be broadly uniform. But has this really happened? Despite the existence of a Model VAT Act, none of the States have used this format and have ‘reinvented the wheel’ so to speak in coming out with their own State-specific formats. This has resulted in a situation where provisions concerning a particular issue are worded in totally different ways in each State Act, sometimes giving the same effect, while at other times, giving different effects. At any rate, non-adherence to the Model VAT Act has created avoidable confusion and if the States have indeed agreed upon the basic design of VAT and on the convergence on 22 parameters, it does not stand to reason why they could not agree upon a uniformly drafted VAT Act. 

In order to provide the reader with information about provisions recorded in each State Act as well as to facilitate comparison, an analysis of important provisions is set out under each State. 

Up to the date of completing this Study Report, the Acts, Rules, Schedules and Forms have undergone continuous changes by way of amendments. Thus the analysis should be seen as representing the position on the date of submission of the Report. For the record, we would like to place the source and the basis of the analysis hereunder: