ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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ASSAM-Growing Dissensions

If the state finance ministers were still charmed by Chidambaram into agreeing to a reduction in principle of the rate of the tax on inter-state sales, what could this be attributed to except their conversion to the so-called Laffer curve effect that with rate reduction consignment transfers will vanish. The rationale offered, at the state financial ministers' meeting, for the agreement to scale down the Central Sales Tax rate is that this is a necessary step to evolving a transitional mechanism for reform of interstate rates of taxation to fulfil "the international commitment arising out of the Male Summit that all trade barriers between SAARC countries would be eliminated by 2000". Did not anyone ask Chidambaram how reform of the inter-slate sales tax was linked to any international commitment? Is taxation of sales for export not legally prohibited? In fact, sales for export are eligible for exemption at not just the point of the actual transaction but two points before that. But obviously logic does not prevail sometimes.

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