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VAT
deadline for all states may be deferred to Apr 2003
Agencies
- New
Delhi
The government is likely to postpone by an year the deadline for
nationwide implementation of value-added tax (VAT) system to April
2003 in the face of slowdown and other hurdles faced by states.
Indicating this, the finance ministry officials said a formal decision
in this regard would be taken at a meeting of state finance ministers
slated to be held here on January 23.
Originally, the plan was to implement VAT in at least 15 states
from next April while providing up to one year time to other states
to do so. But the lacklustre performance of the economy and the
fear of lower revenue mop up have made states jittery in going ahead
with implementing VAT from April this year. Moreover, most of the
states showed lack of preparedness to adopt the new system.
The empowered committee on VAT, headed by the West Bengal finance
minister Mr Asim Dasgupta, had said that VAT would be implemented
in 15 major states from April after the Centre assured financial
compensation in the case of revenue loss in the process. The Centre
had asked the committee to draw up a formula for compensating the
loss in revenue.
The Centre has also decided to amend the central sales tax act this
fiscal to facilitate the smooth transition to VAT. Despite a number
of meetings in the last two months, some of the states have failed
to agree with the empowered committee’s proposals, including
duty rates. The meeting on January 23 is expected to take all the
issues where consensus could not be reached till date and finalise
the tentative date for a nationwide vat implementation.
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