VAT Dasgupta To Vet State Bills, Try Cut The Spin

New Delhi, Aug 12 | Updated: Aug 13 2004, 06:03am hrs
West Bengal finance minister Asim Dasgupta has promised to vet every state legislation on VAT before implementing the new tax regime. The chairman of the empowered committee stressed on uniform procedure and common tax rates. The minister spent four hours with the members of the Confederation of the All India Traders here on Thursday addressing concerns and fears.

Dr Dasgupta said the empowered committee would ensure uniformity in laws and rates of VAT in all states. This would be done by vetting the VAT bills of different states. He said it was his duty to ensure that all states came on board.

I will call on UP chief minister Mulayam Singh Yadav to explain the need and urgency of implementing VAT, the Marxist leader said. Major states, except UP, have declared their intention to implement VAT.

Allaying fears of multiple taxation, Dr Dasgupta reminded that taxes like sales tax, luxury tax, consumption tax, special addition tax (SAT) etc will be subsumed in VAT.

The empowered committee has decided to implement VAT from April 1, 2005. Dr Dasgupta, who is running against the clock to meet the implementation deadline, charmed traders with his presentation on the uses of VAT. Secretary general of CAIT Pravin Khandelwal, once a vehement opposer of VAT, softened and said: It may be possible to implement VAT from April 1, 2005 provided the concerns and fears of trading community are addressed. Our objection is only to implementation of VAT in the present form.

Dr Dasgupta assured VAT is a positive sum game and the prices of commodities will come down after its implementation. VAT, he said, will will help traders increase their business.

Practical fears expressed by traders were:

What happens to laddus and prasad sold at temples Will they be subject to VAT

Will panwalas having a sale of Rs 1,000 per day come into the VAT net

What will happen to about a dozen-odd local levies

Will states be barred from raising other taxes

Is there a roadmap for abolition of central sales tax (CST)

Will the tax laws and rates be uniform in diiferent states

Dr Dasgupta clarified that prasad sold at temples and services provided by the clubs wont be covered. Levies like stamp duty etc cant be abolished by the empowered committee. However, all local levies, except entry tax imposed in lieu of octroi, will be subsumed by VAT.