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States agree over uniform sales tax

All the states and union territories have agreed to comply with uniform floor rate of sales tax by the end of this month, bringing to an end the tax war among the states.

Four rates of sales tax-zero, four, eight and 20 per cent and tax incentives for industry, given by various states to bring in investment, will be applicable to all states and union territories by the end of this month.

The eight-member standing committee for uniform sales tax met in New Delhi today to finalise the nitty-gritty of applicability of the decision taken earlier in this regard.

The committee was presided over by Finance Minister Yashwant Sinha and the convenor was West Bengal Finance Minister Ashim Dasgupta.

Punjab Finance Minister Kanwaljit Singh, who attended the meeting, said the agreement had been reached on 205 items and Pondicherry is the only union territory, which had not so far complied because of change of government there.

But now, the new government has promised to implement the recommendations.

All the states would issue notifications in this regard by April 30 and the next meeting has been fixed on may four to review the implementation.

The establishment of the uniform sales tax is regarded as a major step in the fiscal history of the country, especially so because it has been implemented in shortest possible time, he said.

Punjab will plead for a parity in the central and states' sales tax, Kanwaljit Singh said.

The states will now be competing on the basis of improved infrastructure, instead of tax incentives, to attract investments.

Punjab ranks high in this regard as it provides for better supply of power, good industrial relations, improved communications and other infrastructure.

UNI

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