The exporting community has reported 0.5 per cent increase in their transaction costs in Post-VAT regime with their total transaction costs going up to 9.15 percent in totality, according to a Study on `Impact of VAT for exporters in India' conducted by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).
After VAT regime has been put in place, the total transaction costs suffered by exporters in sectors like Agro & Food Processing (2.90 percent), Automobile & Auto Components (8.50 percent), Drugs & Pharmaceuticals (11.30 percent), Engineering Goods (8.21 percent), Gems & Jewellery (2.50 percent), Leather & Leather Products (11.43 percent) and Textiles and Handlooms & Handicrafts (8.56 percent).
The ASSOCHAM condensed the perception of 164 exporters from 7 export-oriented sectors in 4 states of Haryana, Delhi, Maharashtra and West Bengal.
Releasing the study, Mr Anil K Agarwal, ASSOCHAM President said that “transaction costs have been very high in sectors like Leather & Leather Products and Drugs & Pharmaceuticals Industry."
"These are moderate in Automobiles, Engineering Goods and Textiles and low in Agro & Food Processing and Gems & Jewellery sectors. Exporters from all the five sectors, other than agro & food processing and gems & jewellery felt that VAT has led to increased transaction costs."
"It may be mentioned here that ASSOCHAM analysis is based on the ground level transaction costs to exporters which includes costs due to customs delays, port delays, licensing delays, banking/processing fee delays and delays in refunds”.
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"There are still many steps required to rationalize our tax system to create a common market for accelerated economic growth and international competitiveness. One of the rationales for stepping into the VAT system was to reorganize the tax rates. To bring in uniformity in the tax rate is yet to be achieved”.
The Associated Chamber of Commerce & Industry of India
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