Muddle over VAT rates forces early meet

Just a couple of weeks after VAT has been implemented in 21 states across the country, problems have cropped up on the issue of lack of unif...

Just a couple of weeks after VAT has been implemented in 21 states across the country, problems have cropped up on the issue of lack of uniformity in the new tax rates among states.

While some commodities are being charged higher rates in some states under the new tax regime, they are attracting lower rates in other states thus putting those states with higher rates at the receiving end. For example, the Delhi finance minister wants to take up the matter of lower sales tax on diesel in Haryana and Rajasthan, compared to Delhi, at the meeting.

These issues have pushed the empowered committee on VAT to call for an immediate meeting on Friday and Saturday. Earlier, these meetings were scheduled to be held in May.

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Admitting that the anomalies in the tax rates is a serious problem, secretary of the empowered committee Ramesh Chandra told reporters that while the Panel will meet state tax commissioners and other officials on April 15, finance ministers, including of those states which have not implemented the new tax system, will meet the following day.

Chandra said all other implementation issues will also be taken up by the panel in the meeting. In fact, Chandra said it is the seriousness of the problem, which has pushed the VAT panel to advance the meeting. “We are ready to admit that VAT rates are not uniform (among states). That is why we have advanced our meeting to April 15-16, which was earlier scheduled for May. This is a serious issue for the panel also,” Chandra said.

Chandra said states, including Delhi, have assured the panel in writing that they will abide by consensus in the empowered committee.

On the traders’ opposition to VAT, Chandra said they should come forward for talks with the panel. “Our doors are always open for negotiations with traders. They should present their case in the panel,” he said.

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However, traders also have some responsibilities, he added. “The traders should tell us how many inspectors have visited them since VAT was implemented from April 1 this year,” he said.

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