The Hindu : National : VAT committee nearing agreement

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Sunday, Nov 05, 2006
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VAT committee nearing agreement

Special Correspondent

NEW DELHI: The Empowered Committee of State Finance Ministers on VAT (value added tax) on Saturday neared an agreement on a package of compensation they expect from the Centre to help them reduce the Central Sales Tax (CST) from 4 to 2 per cent from April 1, 2007.

Committee Chairman Asim Dasgupta told newspersons that the panel would meet Finance Minister P. Chidambaram next month to discuss the package of proposals agreed to by the VAT States.

"We have neared 75 per cent of [the] agreement and need another meeting to fully agree on the compensation package," Dr. Dasgupta said after a six-hour long meeting of the panel.

"We don't have much time left for phasing out the CST. So, [an] agreement on [the] compensation package with [the] Union Finance Ministry has to be reached expeditiously," he said.

To a query, he noted that the agreement being reached by the VAT States was different from the proposals presented by the Union Finance Ministry.

The States have posted an increase of 32 per cent in VAT collection in the first six months of the current fiscal at Rs. 34,019.46 crores, compared to the same period the previous year.

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