Financial Daily from THE HINDU group of publications
Thursday, Jan 06, 2005
Industry & Economy
VAT white paper to be released on Jan 17
New Delhi , Jan. 5
STATE Finance Ministers on Wednesday endorsed a white paper on the proposed value added tax (VAT) regime that will replace the sales tax system in the country from April 1. The white paper is to be formally released on January 17.
"I am very happy to announce that the white paper has been finalised and the Empowered Committee has endorsed it. The white paper will be issued on January 17," Dr Asim Dasgupta, Chairman of the Empowered Committee of State Finance Ministers on VAT, said here on Wednesday.
The Empowered Committee of State Finance Ministers on VAT met here to fine-tune the draft and finalise the white paper. The white paper is to be published in English, Hindi and all major regional languages.
It is to be made public to create awareness and clear traders' misgivings about the proposed VAT regime.
The finalisation of the white paper assumes importance in the wake of stiff opposition from traders and apprehension of some States such as Uttar Pradesh on VAT.
Dr Dasgupta said the VAT panel would try to accommodate the views of traders on ground-level difficulties. "It is our collective effort to reduce the difficulties," he said.
Trade and industry bodies have demanded less stringent penal provisions.
On Uttar Pradesh, Dr Asim Dasgupta said the Chief Minister, Mr Mulayam Singh Yadav, had assured the panel that, in-principle, the State favoured VAT but wanted to ensure that it was congenial for traders.
He said discussions are on with the UP Government and certain issues have been pointed out to the Empowered Committee. Dr Dasgupta said the Chief Minister would take the final decision.
The UP Agriculture Minister, Mr Ashok Bajpai, said the State wanted certain modifications such as raising the thresh-hold limit for traders to come under the VAT net from Rs 5 lakh to Rs 10 lakh.
He said the compounding limit for traders also needed to be raised from Rs 40 lakh to Rs 50 lakh. Moreover, UP sought that more than 10 items must be allowed to be treated as "local importance goods" considering the diverse manufacturing activities in the State.
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