Value added tax - what's it all about?
How various people are affected:
Government
The Government benefits on two accounts. Tax evasion can be curbed thereby enhancing the revenue from tax.
Consumers
As far as consumers are concerned, the prices may go up initially, but in the long run, prices will come down. As a net result, consumers will pay less tax.
Traders
Traders are not too keen on the implementation as tax is levied at every transaction point. Traders are apprehensive, as every person will be required to maintain proper records of accounting.
Exemptions
Traders whose annual sales do not exceed Rs. 5 lacs are exempted from VAT. Traders whose annual sales are below Rs.25 lacs do not have to maintain any record; they only have to pay 1% of their total sales as VAT.
The pitfall is that there are no deductions for taxes paid on inputs to another State.
Currently, there is a sales tax war among States on account of which States are vying with each other to reduce taxes and promote growth. This has resulted in regional imbalance in growth among States. This would come to an end with the introduction of VAT.
Geeta Dasarathy |
The role and responsibility of entrepreneurs is changing as India changes. This is an important issue to think about, because the nature of entrepreneurship is different in India- it is more complex, complicated and more granular than the West. 
List out business ideas and make your choice. Once you have identified your business idea, find out what you will require eg. Staff, inventory, storage space, communication network, stationary etc 
