The crucial meeting of the empowered committee of state finance ministers on value-added tax began in New Delhi on Wednesday to resolve all pending issues to ensure smooth implementation of the new tax regime from June 1 this year.

Although, the deadline for VAT introduction was fixed by the panel, headed by West Bengal Finance Minister Asim Dasgupta, at a meeting on April 8, certain issues could not be resolved, official sources said.

At least 16 states, accounting for over 75 per cent of the country's trade and industrial production, had decided to implement VAT from June 1.

Wednesday's meeting would take up several issues pertaining to taxation of certain local items at differential rates, the sources said.

Some of the items that would figure prominently in the VAT meeting are the tax rate for life-saving drugs, naphtha and treatment of maximum retail prices, they said.

Other nitty-gritties on administration of VAT and the stringent provisions which were not acceptable by traders may also be taken up.

The meeting also assumes significance especially in the light of the on-going strike of truckers, who have been protesting against the proposed introduction of VAT.

The introduction of VAT, which was deferred due to lack of preparedness, political pressures and protests from traders, has also prompted the ruling Bharatiya Janata Party-led government to constitute a five-member committee to present its views to Finance Minister Jaswant Singh.

With the introduction of VAT missing the April 1 deadline, the empowered committee is now under pressure to implement it on the new deadline of June 1, 2003.