States get option to increase Vat threshold limit at Rs 10 lakh

New Delhi, March 9 | Updated: Mar 10 2005, 05:30am hrs
Under pressure from traders, the empowered committee has given states the option to revise upward the threshold limit to Rs 10 lakh for a trader to come under value added tax regime from April 2005.

States will also have the option to exempt foodgrain and seeds from the new tax in first year of Vat introduction.

We have given states the option to raise the threshold limit for traders to Rs 10 lakh from Rs 5 lakh, secretary of empowered committee of state finance ministers, Ramesh Chandra told PTI here on Wednesday.

He said states will also have the option to tax foodgrain and seeds at either nil or 4% in the first year of Vat introduction.

The Vat panel, which met earlier this week, also reaffirmed that the deadline of April 1, will not be deviated even if some states like Uttar Pradesh do not fall in line.

Vat panel chairman Asim Dasgupta has already met UP chief minister Mulayam Singh Yadav, who had assured him that they would be sending a team to sort out difference.

Barring UP, he said, Jharkhand is the only state which is not ready for Vat due to the political uncertainties.