Only 9 States Ready With Their VAT Bills: Dasgupta

New Delhi, May 7: | Updated: May 8 2003, 05:30am hrs
Chairman of the empowered committee Asim Dasgupta met finance minister Jaswant Singh on Wednesday to discuss ways of putting in place the new tax regime at the earliest and asked the Centre to expedite clearance of state VAT (value added tax) legislations.

Only nine states are ready with their VAT bills, Mr Dasgupta said after the meeting, adding that seven other states were in an advanced stage of firming up their VAT bills.

He declined to comment on whether the deadline for VAT would be extended as the Centre was not in favour of a patch-work approach of implementing VAT, which is expected to improve revenue collection of states.

Finance ministry sources said states have been advised to send their VAT bills within this week, as it takes a minimum of 21 days to get Presidents nod.

Sources said the VAT bills of states differed from the model Bill circulated by the Centre and hence the delay in getting presidential assent.

Although nine states have sent their VAT bills to the finance ministry, states like Delhi, UP, Rajasthan and Punjab have decided to defer it because of elections while Jammu & Kashmir and North-eastern states were unable to firm up the bills.

The VAT panel had earlier announced that 16 states, accounting for 75 per cent of the countrys trade and industry, would be in a position to implement VAT from June. The states missed the April 1 deadline as only one state Madhya Pradesh obtained Presidents nod on its VAT Bill.

It is perhaps, given the circumstances of the country, not possible at all to abolish Central Sales Tax (CST) at one go. There will be severe revenue implication for the states and secondly it will affect the monitoring of inter-state sales, Mr Dasgupta said.

However, he said very soon the issue of additional excise duties on sugar, tobacco and textiles, could be resolved.

Appropriate amendments have been incorporated in this regard in the Finance Bill, which is in the final stages of being passed by Parliament, he said.

On the issue of revenue neutral rate (RNR), he said such a rate worked out to be different across the states but the committee thought of fixing the standard uniform rate.

He said the Lok Sabha on Tuesday passed the Constitution Bill to entail the states a share in services tax by including the sector as a specific entry in the Union List.