The Hindu : New Delhi News : Threat to cut VAT on bullion

Online edition of India's National Newspaper
Tuesday, Aug 02, 2005

New Delhi

New Delhi

Threat to cut VAT on bullion

Staff Reporter

NEW DELHI: Virtually issuing an ultimatum to the Empowered Committee on Value Added Tax (VAT), the Delhi Government on Monday warned that it would be forced to reduce VAT on bullion from one per cent to 0.25 per cent within seven days if other States, violating the agreed floor rates, are not asked to fall in line.

"We have asked the Empowered Committee, including its chairman and West Bengal Finance Minister Asim Dasgupta, about the failure of other States including Rajasthan and Gujarat to stick to the agreed floor rates. If the situation is not resolved within seven days' time, we would be forced to take a decision on reducing VAT on bullion in Delhi from one per cent at present to 0.25 per cent,'' remarked Delhi's Finance Minister A. K. Walia.

Dr. Walia said he had brought the issue to the notice of Mr. Dasgupta as it had been agreed at the last meeting of the Empowered Committee that all the States would charge the same floor rate of one per cent from August 1. However, with the deadline for implementation of the new rates having passed on Monday, no State except Delhi had implemented the agreed VAT rate, he said, adding that because of this anomaly Delhi was suffering a loss of revenue as major bullion trade had shifted base to adjoining Rajasthan, Gujarat and Uttar Pradesh.

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