Rethink decision, Ficci asks BJP

New Delhi, March 21 | Updated: Mar 22 2005, 05:35am hrs
Ficci has urged BJP state governments to adopt the second strategy learning by doing with Haryana as the model, where revenues have in fact gone up.

We urge the BJP state governments to reconsider their decision and adopt Vat from April 1 and work with their states on internal mechanisms aggressively while coordinating with the Centre to iron out the genuine difficulties raised in the press release by BJP, said Ficci president Onkar S Kanwar.

While BJP was in power at the Centre, they were, in our view, correctly pushing for implementation of Vat and thereby the second strategy learning by doing would be more appropriate at this point of history, he said.

Ficci has always strongly supported the introduction of Vat. It is the progressive tax system that will appropriately address the multiplicity of state taxes and the multiplicity of rates. It will create a rational tax system in the country that is the need of the hour. Ficci supports the decision of all-state, multi-party empowered committee, headed by Asim Dasgupta, finance minister, West Bengal, to introduce Vat from April 1, he added.

Appreciating the concerns raised by BJP regarding requisite preparedness, legislative preparation in states, required information systems and procedures for implementation so that payers can obtain exemptions and set offs in a hassle-free manner and most importantly the concern over co-existence of Central State Tax (CST) with Vat, Mr Kanwar felt that it was only by introducing Vat on April 1, followed by determined actions to tackle these problems, that will result in ironing out these concerns.

In other words, there are two alternative strategies available to the country. First address most of the difficulties in theory and then go to the practice of Vat, and second introduce Vat and experience the first hand ground level realities in ironing out practical difficulties. Haryana followed the learning by adopting the model.

Ficci feels that the latter strategy as evinced by Haryana must be followed in ironing out the difficulties after introducing Vat.