BJP CMs ready for VAT but want loopholes plugged

Briefing the media later, BJP leader Jaswant Singh said the conference exhaustively reviewed VAT, and had several misgivings. Although Singh did not spell out a time-frame, some CMs were keen on adopting the regime by the start of the next financial year, sources said. In fact, the pressure to adopt VAT came from more ‘‘developed’’ states, particularly Gujarat, which — as a key manufacturing hub — was losing out on revenue by being out of the VAT system. On the other hand, Chhattisgarh CM Raman Singh remained a staunch critic because his mineral-rich state stands to lose.

Taking into account these concerns, the conference decided to request the Centre to provide ‘‘adequate fiscal compensation’’ to states that have raw material, such as Jharkhand and Chhattisgarh, to offset their revenue loss on account of reduction/abolition of Central Sales Tax (CST).

It was also decided that the finance ministers of the BJP-ruled states would meet on December 15 to ‘‘formulate their combined position’’ at the meeting of the Empowered Committee the next day.

Some of the concerns that will be raised at the December 16 meeting are: ‘‘unclear’’ roadmap for abolishing CST; ‘‘inadequate’’ flexibility to states exempting items of local importance; need for devolution of service tax to the states; and 100 per cent compensation for loss of revenue in the first year of adoption of VAT.

The conference also decided that all BJP-ruled states would implement total ban on slaughter of cows, bulls and bullocks in light of the ‘‘landmark’’ Supreme Court verdict. The states would also ‘‘identify and deport illegal migrants’’ in accordance with the Foreigner Act.

Expressing concern at the UPA government’s ‘‘soft attitude’’ towards Naxalites, the conference decided that BJP CMs would meet PM Manmohan Singh and present a memorandum to him on how to tackle the problem.