Delhi, neighbouring states to set up economic intelligence unit to check tax evasion

NEW DELHI: Delhi, Punjab, Haryana and Himachal Pradesh on Thursday agreed to create a system to bring " uniformity in tax rates" and develop a common market. At a meeting held at the Delhi secretariat, the four states decided to set up a zonal economic intelligence unit to check tax evasion.

The meeting was attended by deputy CM Manish Sisodia besides finance ministers of the three north Indian states. The AAP-led Delhi government also invited UP, Rajasthan, Uttarakhand and J&K to join this initiative.

"It has been felt that due to huge variance in tax rates, Delhi and its neighbouring states are witnessing a loss of revenue. Since VAT is a major source of revenue of these states, uniformity of taxes is essential to safeguard revenue," a Delhi government statement said.

Those present included deputy CM of Punjab Sukhbir Singh Badal, along with his finance minister Parminder Singh Dhindsa, Haryana finance minister Captain Abhimanyu and Himachal finance minister Parkash Chaudhary.

Many states have increased the tax rates above the floor rates recommended by empowered committee of state finance ministers. It was decided there should be uniformity in tax rates of VAT on all goods, especially the goods in which trade diversion takes place with minimum difference in the sale price.