FM takes some flak on VAT delay

The Value added Tax VAT issue continues to haunt Bharatiya Janata Party. Finance Minister Jaswant Singh had to face a volley of protests a...

The Value added Tax VAT issue continues to haunt Bharatiya Janata Party. Finance Minister Jaswant Singh had to face a volley of protests at the just-concluded BJP national executive meeting. Left with no choice but to placate angry national executive members, the ruling party came out with a resolution on VAT. Earlier, it was planned that there would be no economic resolution. It was agreed that the political resolution would include a paragraph on economic concerns of the party.

The stoutest protest on VAT was led by Delhi leaders, notably Madan Lal Khurana, Jagdish Mukhi and VK Malhotra, who were later joined by leaders from other states. 8220;Nearly 20-25 leaders spoke on the issue VAT and the finance minister was asked to respond,8221; a senior BJP leader said. However, protests became louder after the FM spoke, he quipped.

Most members of the BJP national executive objected to the reference to VAT implementation on April 1, 2003, in the finance minister8217;s Budget speech.

8220;This is a state subject and it should not have been made a part of the Union Budget speech. By doing this the FM has given an oppurtunity to the Congress to campaign for directing the fury of the traders against BJP. Obviously, BJP cannot be seen as not doing anything for the traders,8221; said BJP sources. They also pointed out that given the extent of opposition it will be difficult to agree to a date to implement VAT in 2003. Also, in view of the general elections in 2004, the deadline in all likelihood will be deferred.

None, however, opposes the VAT regime in principle. 8220;There is no escaping the VAT system, it will definitely improve the revenue position of the states,8221; a senior BJP leader said and added that much of the opposition is part of misinformed resistance. 8220;The FM8217;s Budget speech has made the issue all the more complicated,8221; he added and pointed out that trade organisations should have been taken on board in order to stymie resistance to the new system.

Meanwhile, the BJP national executive meeting said in a formal resolution, 8220;BJP national executive takes a serious note of business community8217;s agitation against VAT. This is not a partisan issue.8221;

In an effort to blunt the criticism that BJP-run Union government is forcing the legislation, the resolution states, 8220;the very concept of VAT was initiated during the Congress regime and majority of all state governments belonging to all political parties have accepted it voluntarily without Union government8217;s coercion. It is blatantly wrong to suggest that the Central government or BJP has forced this legislation on state governments.8221;