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CMs' panel to streamline ST reforms and NBFCs

Union Finance Minister Yashwant Sinha on Monday evening set up a committee of chief ministers of six states to look into sales tax reforms, countrywide introduction of value added tax and incentives for the backward areas.

The formation of the committee was announced by Sinha after a one-day meeting of chief ministers and finance ministers of West Bengal, Orissa, Gujarat, Haryana, Karnataka and Arunachal Pradesh In New Delhi to discuss regulating non-banking financial companies, stamp duty and sales tax reforms. The report of the committee will be submitted by November 15.

The committee among other things will outline the implementation schedule for uniform floor rates for sale tax, recommend phasing out sales tax based incentive schemes, formulate the criteria for definition of backward areas eligible for incentive scheme, including the maximum quantum of such incentives with the mechanism for its monitoring. The committee has also been asked to suggest the time-frame for the introduction of VAT and reduction of the central sales tax.

The meeting recognised that it would be anomalous to continue with the CST in the SAARC regime. The states proposed reduction of CST in a phased manner and to share collection between the exporting and receiving states. A modality should be devised for compensating any loss of revenue in the transition period, the participants said.

On the registration act, there was consensus that it requried amendments to overcome delays in registering deeds of immovable properties in the states. The practice of transferring the property through power of attorney deeds should be regulated by enhancing stamp duty on par with the conveyance deeds.

Sinha said his government would strive to implement the consensus reached at the meeting from April next year and the new rates would be brought into force by the states and Union Territories by April.

UNI