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States agree on nationwide VAT implementation

July 07, 2003 16:21 IST

In an apparent climb-down from its earlier stance, the Empowered Committee on value-added tax on Monday gave in to the Centre's plan for a nationwide VAT implementation.  

"It's a major decision for the country as a whole. When we introduce it, we want the acceptance to be total," VAT panel chairman Asim Dasgupta said after a meeting in New Delhi.

The move comes as a climb-down from the panel's previous stance that VAT could be introduced in about 11 states, accounting for two-thirds of India's trade and industry, at the first stage.

The states' request for a partial introduction of VAT was rejected outright by the Centre with Finance Minister Jaswant Singh disfavouring a "patchwork" approach in phasing out central sales tax or doling out relief to states which expected revenue loss after VAT.

Declining to set any new timeframe as was done earlier, Dasgupta said the VAT panel would meet the finance minister within a fortnight to set the date of meeting with major political parties.

"The timing and details of VAT implementation will be worked out only after the discussion with political parties," he said.

Dasgupta claimed that 22 states had sent in their VAT bills to the Centre for President's assent.

Although seven states were ready with VAT bills, others backed out after the Centre pressed for a holistic approach.


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