State-Level Value Added Tax and Its Revenue Implications in India

Damodar Nepram
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Damodar Nepram: The author is Reader, Department of Economics, Manipur University, Canchipur, Imphal 795003, Manipur, India; email: dnepram@yahoo.co.in

Margin: The Journal of Applied Economic Research, 2011, vol. 5, issue 2, 245-265

Abstract: Sales tax was the most important state tax in India, contributing a significant proportion of their receipts. However, the tax itself had many drawbacks, that is, double taxation, multiplicity of rates, tax competition, etc., as a result of which its reform was considered a necessity. After much preparation, the tax was replaced by the value added tax (VAT) from April 2005 by most states as a part of domestic trade reforms being initiated in the country. The present study using panel data analysis finds that the adoption of VAT has been a good source of revenue.

Keywords: Sales Tax; VAT; Revenue; JEL Classification: H25; JEL Classification: H71; JEL Classification: C33 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:mareco:v:5:y:2011:i:2:p:245-265

DOI: 10.1177/097380101100500204

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