Financial Daily from THE HINDU group of publications
Saturday, Apr 16, 2005
Industry & Economy
`Variations' in State laws to figure at VAT meet
Dr Asim Dasgupta, Chairman of the Empowered Committee of the State Finance Ministers on VAT, with chartered accountants releasing the ICAI guidance note on `Accounting for State-level value added tax' in the Capital on Friday. - Kamal Narang
New Delhi , April 15
THE Empowered Committee of State Finance Ministers on value-added tax is hopeful of resolving the "variations" that had crept into legislations enacted by various state governments to implement State-level VAT.
The State Finance Ministers are also likely to discuss the impact of VAT on prices at the Committee meeting here on Saturday.
"If we take the 21 States that implemented VAT collectively, then the variations as a whole have not been significant and noticed only in respect of a few States. We will be able to resolve them," Dr Asim Dasgupta, Chairman of the Empowered Committee, told reporters after releasing a guidance note on `Accounting for State-level VAT,' prepared by the Institute of Chartered Accountants of India (ICAI).
Dr Dasgupta held that "variations" included discrepancy in rates and deviations from agreed points of convergence.
But, declining to get into the specifics, he said State Finance Ministers would deliberate on the "variations" at the meeting.
The Committee Chairman also expressed hope that the remaining States (the five BJP-ruled States of Madhya Pradesh, Gujarat, Jharkhand, Chhattisgarh and Rajasthan and the three States of Tamil Nadu, Uttar Pradesh and Uttaranchal) would, in keeping with their own decisions, adopt VAT at an appropriate time.
Earlier in the day, Dr Dasgupta chaired a four-hour-long meeting of sales tax/VAT commissioners from all the States and Union Territories. The meeting was convened to discuss the "implementation issues" arising from the introduction of State-level VAT in 21 States. Dr Parthasarathy Shome, Advisor to the Union Finance Minister, also attended Friday's meeting.
The VAT rate on diesel came up for discussion at the meeting. The Delhi Government, which had pegged the VAT rate on diesel at 20 per cent, was keen that its neighbour (Haryana) also conform to the decision of the empowered committee. Haryana has a lower VAT rate on diesel.
"We presented our stand on the issue to the committee," the Delhi Sales Tax Commissioner, Mr R.K. Verma, said.
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