1. #1
    Unregistered

    Why the government have raised the VAT from 4% to 5% on consumer electronics?

    Tax is an mainly source of income of government Okay... but can anybody tell me that why gov has made the vat from 4% to 5% on laptops, fridges etc...

  2. #2
    S.Venkateshwarulu Array
    Join Date
    Feb 2012
    Location
    Hyderabad
    Posts
    375

    Re: Why the government have raised the VAT from 4% to 5% on consumer electronics?

    Hi Buddy,

    As you have said Tax is the main source of Income of a government but your query of why VAT of 4-5% on Consumer electronics can be explained as

    --> Once upon a time say a decade ago consumer electronics were not that popular and also the customers hardly preferred to buy goods like Tv's, Tape recorders, etc....
    --> With the advancement in technology the whole world has started to change the sizes of the electronics goods have become from small to tiny.
    --> Also the prices of the consumer goods have been drastically decreased so that even a middle class person can afford to buy them.
    --> As you have mentioned laptop wasn't a popular electronics good before 5 years but now most of the college students Software IT employees need them daily in their daily work.
    --> Almost every person in India or say a family in India has a cellphone, TV in their home, this shows that the importance of electronics goods has risen above par.
    --> By taking all the above points into consideration the government has also made sure that by increasing VAT from 4-5% the income of the Government of India will increase.
    --> The govt has announced many free schemes and policies to women and students in order to compensate this they must get the income from the other end for which they have chosen Consumer electronics as one of the medium of source of income.

    I hope that the points i have mentioned above would have helped you in clarifying your doubts.
    All the best.

    @ S.Venkateshwarulu

  3. #3
    Raj@08 Array
    Join Date
    Apr 2012
    Posts
    410

    Re: Why the government have raised the VAT from 4% to 5% on consumer electronics?

    Govt has increased as the demand of these consumer durables are increasing day by day and people are spending more of their incomes on such goods which indirectly leads ti high inflation. Thus to curb the inflation govt has taken such steps.

    Hope your doubt is clear now

    Raj@08

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