New Delhi, July 08: Against the backdrop of assembly elections in four states this year, the Empowered Committee of state finance ministers on Value Added Tax (VAT) has taken the centre’s stance that VAT should be implemented by the states only after arriving at a consensus with major political parties. Since a series of state elections and possible general elections dot the calendar for the rest of the year, the chances of political parties taking a decision, which could alienate any section of voters are slim. This postpones implementation of VAT indefinitely.
“It is a very major decision for the country as a whole. When we introduce VAT, we want total acceptance,” said Asim Dasgupta, chairman, Empowered Committee.
With the finance minister Jaswant Singh making it clear that implementation of VAT in bits is not possible, states have reconciled to a simultaneous implementation of VAT, whenever it comes into force. Prior to June 1, 10 States accounting for two-third’s of the country’s trade were willing to switchover to VAT even if other states did not join.
The panel will meet the FM within a fortnight to fix a date for the meeting with the political parties. A decision on the timing will be taking only after a consensus is arrived at. The panel also took stock of the states’ readiness to implement VAT. Bureau Report