The Indian Economy Blog

October 24, 2007

VAT a success

Filed under: Business,Fiscal policy — Ravikiran Rao @ 4:13 pm

Uttar Pradesh has fallen in line with the rest of India and implemented VAT. Subhomoy Bhattacharjee writes in the Indian Express on “the biggest success story of Indian public finance“.


  1. While at API, a colleague of mine did a paper on VAT. I was not involved. But I wonder how the imposition of VAT has changed accounting standards, the reporting of profits or for that matter, valuation of vertically integrated or non-integrated companies on the stock market? How does it affect various capital instruments (IPO, share split, mergers, etc) used by firms? Did any entity exploit the market during the transition (or, for that matter, intends to in the future)???

    Comment by Prasad Rao — October 30, 2007 @ 11:24 am

  2. VAT only replaces sales tax. It does not remove the other big incentive to fudge accounts – Excise. But the article says that reporting has improved to some extent.

    Comment by Ravikiran Rao — October 30, 2007 @ 1:21 pm

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