Impact of VAT Implementation on Price Stability and Economic Welfare of Jammu & Kashmir: An Empirical Study on Tax Authorities' Perception

Abstract

Stability in prices and economic prosperity are the two important pillars of general welfare and wellbeing of the people. The other development objectives are also based on these two features of the economy. Stability in prices and growth in revenue are the positive economic effects of an indirect tax system like Value Added Tax (VAT) system. An indirect tax system should have no inflationary effects on prices. It should be income elastic and growth oriented. The present paper is an attempt to examine as to how far value added tax system has been effective to stablise the prices and contribute to the economic welfare of J&K from the perspective of State Tax authorities (Tax administrators). The paper also suggests some measures to make VAT more income and growth oriented in the State.