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States for 100% compensation on VAT

States will demand 100 per cent compensation for the revenue loss suffered by them while implementing the nationwide value-added tax from April 2003, Empowered Committee chairman Asim Dasgupta said on Friday.

"The Union finance ministry will take a final view on the revenue compensation while VAT is implemented," Dasgupta said after a meeting of finance secretaries of states New Delhi.

The West Bengal finance minister said 24 states have finalised their VAT legislations and the remaining four states have in principle agreed to finalise it shortly.

"We are confident that the April 2003 deadline for implementing VAT will be met," Dasgupta said.

The Empowered Committee discussed various modalities of the uniform VAT legislation and decided to form a group comprising of Commissioners of Commercial Tax from Maharashtra, Karnataka, Gujarat, Uttar Pradesh, West Bengal and Assam.

The group will also have representatives from Confederation of Indian Industry, Federation of Indian Chambers of Commerce and Industry and Institute of Chartered Accountants of India.

Dasgupta said the group will find out the points of convergence and the distinctive features.

"The group will submit its report on the draft VAT legislation within a fortnight. By October 19, we will have a final draft of the VAT bill," he added.

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