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Determinants of Registration of Unincorporated Enterprises under State Value Added Tax Act in India

Author

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  • Mukherjee, Sacchidananda
  • Rao, R. Kavita

Abstract

Unincorporated enterprises often bypass formal regulations in general and taxation in particular. Bringing unincorporated enterprises under taxation system is a challenge often faced by tax administrators and it is in this regard the present study explores the factors which influence decision of unincorporated enterprises to get registered with State Value Added Tax (VAT)/ sales tax authority. This analysis is limited to the decision regarding registration. It is not necessary that enterprises which are registered will pay taxes and/or file return- however; the process of registration does provide some information to the tax department for follow up. The study throws up some interesting results for policy makers and tax administrators.

Suggested Citation

  • Mukherjee, Sacchidananda & Rao, R. Kavita, 2017. "Determinants of Registration of Unincorporated Enterprises under State Value Added Tax Act in India," MPRA Paper 81236, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:81236
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    File URL: https://mpra.ub.uni-muenchen.de/81236/1/MPRA_paper_81236.pdf
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    References listed on IDEAS

    as
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    3. Áureo De Paula & José A. Scheinkman, 2011. "The Informal Sector: An Equilibrium Model And Some Empirical Evidence From Brazil," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 57, pages 8-26, May.
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    5. Anuradha Joshi & Wilson Prichard & Christopher Heady, 2014. "Taxing the Informal Economy: The Current State of Knowledge and Agendas for Future Research," Journal of Development Studies, Taylor & Francis Journals, vol. 50(10), pages 1325-1347, November.
    6. Emran, M. Shahe & Stiglitz, Joseph E., 2005. "On selective indirect tax reform in developing countries," Journal of Public Economics, Elsevier, vol. 89(4), pages 599-623, April.
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    13. Mukherjee, Sacchidananda & Rao, R. Kavita, 2015. "Factors Influencing Unincorporated Enterprises to Register under Value Added Tax (VAT): An Analysis with Enterprises Survey Data," Working Papers 15/145, National Institute of Public Finance and Policy.
    14. Áureo de Paula & Jose A. Scheinkman, 2010. "Value-Added Taxes, Chain Effects, and Informality," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(4), pages 195-221, October.
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    More about this item

    Keywords

    Tax Registration; Unincorporated Enterprises; Informality; Value Added Tax (VAT); Partnership Firms; Proprietary Enterprises; Probit Model; India.;

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • L53 - Industrial Organization - - Regulation and Industrial Policy - - - Enterprise Policy

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