VAT panel to meet on Monday

NEW DELHI: The Empowered Committee on Value-added Tax will meet on Monday to discuss the roadmap for the introduction of new tax regime hopefully by the next fiscal year.
Some of the members of the VAT panel are also scheduled to meet Union Finance Minister Jaswant Singh to discuss the phase-out of central sales tax, official sources said on Sunday.
After discussion with Singh, the contentious VAT issue would be taken up with major political parties for arriving at a national consensus.
VAT missed its deadline at least three times since 2001. Viewing the states'' lack of preparedness till May 31, the Centre decided to come up with a "new roadmap" in consultation with political parties and Empowered Committee of state finance ministers.
Andhra Pradesh, Maharashtra, West Bengal, Gujarat, Karnataka, Madhya Pradesh, Kerala, Assam, Meghalaya, Tamil Nadu and Haryana, accounting for two-thirds of country''s trade and industry, wanted to implement VAT from June.
VAT panel''s chairman and West Bengal Finance Minister Asim Dasgupta had asserted that 11 states were ready to introduce the new tax regime provided they get Presidential approval of their respective VAT bills.
However, most of the states failed to get President''s nod for their respective VAT bills.
Despite the panel''s hope that VAT could be implemented even with the 4.0 per cent Central Sales Tax, most of the states were apprehensive of revenue loss. They also failed to get their VAT bills approved in time.
Moreover, the Centre opposed a "patchwork" implementation without all states fully prepared for it.
Union Finance Ministry made it clear that VAT would be implemented "only after full preparation" to enable all states to reap "full" benefits of the new tax regime, replacing the sales tax in states.
Till June 19, sources said only eight states -- Andhra Pradesh, Gujarat, Kerala, Karnataka, Madhya Pradesh, Maharasthra, Meghalaya and West Bengal -- had got the VAT legislations passed by their respective legislatures.
Only Madhya Pradesh has received the Presidential assent, while Haryana implemented a VAT system but with 10 per cent rate for manufacturing and services sectors, from April 1 this year.
However, when the VAT bills were sent to centre, it was found that there was "considerable" variations from the relevant decisions of the Empowered Committee.
The Centre has stressed on a consensus and higher level of awareness among traders in the states, for which simplicity and uniformity is important.
Traders across the country also insisted that implementation of VAT in the present form would be detrimental to trade and industry.
They sought an extension to the VAT deadline to at least next fiscal.