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VAT committee to decide on variations in tax slabs today

Special Correspondent

All round rise in prices to be discussed


Out of the 21 States that have implemented the new tax system, only a few of them had tinkered with the recommended tax slabs under VAT

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ACCOUNTING GUIDANCE: The Chairman of the Empowered Committee of State Finance Ministers on VAT, Asim Dasgupta, releasing ICAI guidance note on `Accounting for State-Lavel Value Added Tax' in New Delhi on Friday. — Photo: Kamal Narang

NEW DELHI: The Empowered Committee of State Finance Ministers on Value Added Tax (VAT) is to take a decision on Saturday on the issue of removing the variations in the tax slabs, which have been imposed by various State governments under the new regime with an eye on higher revenues.

Today's meeting, attended by Parthasarthy Shome, Advisor to the Finance Minister, P. Chidambaram, and other officials of the Ministry, also discussed the issue of price rise, ostensibly owing to VAT. The inflation rate for the first week of the new financial year has already indicated an upward movement.

The VAT Committee, according to its Chairman and the West Bengal Finance Minister, Asim Dasgupta, will discuss in depth the issue of an all-round rise in prices on account of the implementation of the VAT regime by 21 States from this month.

In preparation of the Saturday meeting, the Committee today collected data on the variation in VAT rates and other issues involved in the implementation of the new system from officials of States which have switched over to the new regime. Tomorrow's meeting is to be attended by the finance ministers of even those States that have not switched over to the VAT system as yet.

Emerging from the four-hour long deliberations with the sales-tax commissioners of States and other officials concerned, Mr. Dasgupta told newspersons that any decision on the variations in VAT rates would be announced tomorrow. According to sources, the data collected revealed that out of the 21 States that have implemented the new tax system, only a few of them had tinkered with the recommended tax slabs under VAT. In particular, Delhi was one of them. "If we take 21 States that implemented VAT collectively, there have not been significant variations (in VAT rates) from their committed stance. In a few States, we have noted deviations,'' Mr. Dasgupta added.

Among the States, Delhi, for instance, has altered the VAT slab rates for some items and placed nearly 14 categories of items under the exempted list on Wednesday. The VAT Committee had originally recommended three slabs for VAT, namely, nil for the exempted category, 4 per cent and 12.5 per cent.

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