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VAT: Punjab should learn
from Haryana The Haryana VAT Act should be emulated by all other states, especially Punjab. True, Punjab and Haryana stand almost on an equal footing in VAT collection from the organised and unorganised business sectors. But if Haryana achieves higher revenue collection year after year vis-a-vis Punjab, the reasons are not far to seek. In April 1995, Haryana abolished all the check posts and barriers on its state borders, unmindful of the fears of a sharp decline in revenue earnings. The figures of subsequent years belied the critics’ fears. Dealers of the neighbouring states doing business with their counterparts in Punjab now feel that the barriers in Punjab have virtually become dens of corruption where tax evaders are protected and offenders of the law are made to pay hefty penalties for minor lapses. In July 2000, Haryana checked corruption and plugged tax evasion when it introduced two new documents — ST 38 inward and ST 38 outward — which were required to be carried compulsorily by the drivers, besides other documents, with all commercial goods, exceeding Rs 25,000 (raised from the earlier Rs 10,000) in value during intra- and inter-state movement. In the absence of check posts, this system has been working well.
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