Finance Committee Wants To Know VATs The Fuss Now

New Delhi, March 26: | Updated: Mar 27 2003, 05:30am hrs
The standing committee of finance has asked for a detailed report on the meetings of state finance ministers which decided on the implementation of value added tax (VAT) with effect from April 1.

According to sources, inspite of differences among the members, a majority of them belonging both to the Congress and the Bharatiya Janata Party (BJP) wanted to end the chain of accusations and counter accusations.

Sources pointed out that the process had been long drawn and states had been duly consulted. The first meeting of state finance ministers was held in 1994 and discussions pertaining to compensation for states held up the process till 1999. It was agreed to implement VAT by April 2001 but was deferred further till April this year with different states framing their legislation on the new tax regime. Sources said political opposition now was misplaced since the state finance ministers had agreed to implement the tax regime.

Instead, members were of the opinion that states should undertake awareness programmes to educate the traders and consumers regarding the VAT regime.

Political opposition both from the ruling party and the main opposition party have emerged close to the implementation of VAT despite an agreement of the Union government with the state finance ministers belonging mainly to the Congress party.

Sources said this was an election year and no party wanted to upset the trading community, but at the same time, there were compulsions for widening the tax net.

Traders have organised protest in almost all major cities of India against VAT and the public demonstrations have compelled political parties to take a stand. In particular, this has become a crucial issue in Delhi, which has a sizeable trading community.