India increases VAT in four states
Monday July 20, 2009
A number of states in India have increased VAT rates, in a move that could increase prices for consumer electronic goods.
Gujurat, Rajasthan, Kerala and Uttar Pradesh have raised VAT by one to 2.5 per cent, meaning consumers will now have to pay a 12.5 per cent VAT rate on purchased goods.
India’s Consumer Electronics and Appliances Manufacturers’ Association said the hike could have a potentially adverse impact on the industry.
Suresh Khanna, general secretary of the association, told The Hindustan Times: "These four states contribute over 30 per cent of the total industry’s revenue and we expect this to drop by ten per cent due to the price increase."
The consumer electronics sector generates some 1,250 rupees for state governments, at a VAT rate of 12.5 per cent.
In related news, the Irish government was recently criticised by the European Court of Justice for failing to comply with European VAT legislation. 