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Deadline for VAT to be missed
Anil Sasi in New Delhi |
April 01, 2003 12:19 IST
No state is in a position to switch to the value-added tax regime by April 1. The earliest that any of them will make the transition is April 15. And the handful of states that will switch to VAT in 2003-04 are expected to do so by July 1.
This is the third time in a row that switchover to the VAT regime has been deferred. The deadline was missed by states both in 2001 and 2002.
Only five states -- West Bengal, Gujarat, Maharashtra, Andhra Pradesh and Karnataka -- have sent their VAT Bills to the President for approval.
Presidential assent will take at least seven days, after which the states can notify rules and procedures. The empowered committee of state finance ministers will meet on April 8 to take stock of the situation.
So far, only 12 states have had their VAT Bills approved by their legislatures. These include Haryana, Rajasthan, Maharashtra, Goa, Kerala, Karnataka, Andhra Pradesh, Orissa, West Bengal, Madhya Pradesh and Jharkhand.
Some states, like Rajasthan, are yet to send their Bills for presidential assent. Others, like Kerala and Tamil Nadu, have suggested changes in their Bills. Also, states with bi-cameral legislatures, like Uttar Pradesh and Madhya Pradesh, will take more time to get their Bills passed.
West Bengal's Finance Minister Asim Dasgupta, who chairs the empowered committee of state finance ministers, has said his state will introduce VAT before April 8.
While the states are largely to blame for the VAT delay, the Centre has also soft-pedalled the issue of lowering the central sales tax from 4 per cent to 2 per cent, which will require Parliament's approval. <P>"Having a VAT regime with 4 per cent central sales tax will be unfair and the Centre needs to get parliamentary approval prior to pressing states to shift to VAT," a state government official said.