The Hindu Business Line : Punjab Cabinet nod for VAT Bill

PUNJAB is to promulgate an ordinance for the introduction of the State-level value added tax (VAT) system from April 1 this year, the State's Finance Minister, Mr Surinder Singla, said hereon Tuesday.

Addressing the Assocham-PHDCCI national conference on `State VAT for a common Indian market — Issues and challenges' here today, Mr Singla said the Punjab Cabinet had approved the VAT Bill on Monday.

Mr Singla also highlighted that it is a difficult task for States to reconcile their differences and come to a consensus on various parameters relating to VAT implementation.

"My State (Punjab) is a consuming State. We wanted the 4 per cent Central sales tax (CST) to be abolished at one go. But that is not going to happen as there are others including the large manufacturing States who would prefer the CST to continue for now and be eventually phased out", he said.

Another issue highlighted by him related to VAT on food grains. "There are States that do not want to levy VAT on food grains and there are States such as ours (Punjab), which does not want to forego revenues of Rs 800 crore coming from 4 per cent purchase tax on food grains.

"Therefore, the empowered committee has given the option of either charging 4 per cent or exempting foodgrains from VAT. We would prefer to retain the 4 per cent", Mr Singla said.

The Finance Minister of Punjab said that his State was keen to implement a VAT system that would reduce cost of compliance and also encourage self-assessment.

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