Tamil Nadu joins the VAT club
VAT, or the value-added tax as it is popularly known, is clearly gaining ground, with Tamil Nadu state government also deciding to implement the new taxation system in the state from the first day of the next year. VAT, which seeks to simplify the tax structure and create a uniform common market within the country, replaced the sales tax in India on January 4, 2005. It was adopted by all but three states though: Tamil Nadu, Pondicherry and Uttar Pradesh. Now even Tamil Nadu has jumped on the VAT bandwagon. The development calls for a relook at the new taxation system.