Value Added Tax reforms in India
VAT is a general consumption tax assessed on the value added to goods and services. This new system of taxation was introduced by the government for helping common people, traders, industrialists and also for the collection of the actual revenue from the traders and consumers. VAT system had removed double taxation and reduced the tax burden of the consumers and hence provided uniformity of tax system followed in different states across the country. VAT which was introduced as a taxation system has had multiple effects on the economy such as state government, manufacturer, stockist, retailer and most importantly the consumer. Here an attempt is made in this paper to study the effect of implementation of VAT in Indian Context. The investigation has been done with the help of primary data collected from Consumers and Traders on a random basis. The study found that the total tax revenue collected by the state governments has shown a drastic increase of nearly 100% in the post VAT introduction years.
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