The Hindu : National : VAT to be imposed in U.P.

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VAT to be imposed in U.P.

Special Correspondent

Mayawati

LUCKNOW: In her first major action after expanding the Cabinet and reshuffling Ministers, Uttar Pradesh Chief Minister Mayawati on Friday decided in principle to impose the Value Added Tax (VAT) in the State.

The decision was taken at a Cabinet meeting presided over by the Chief Minister. The Cabinet authorised the Chief Minister to fix the date from which VAT would become applicable.

Significantly, U.P. is the only State which has not enforced the new tax regime so far and manufacturers and traders were consequently deprived of the benefits of input tax credit. Its impact was also felt on the goods manufactured in the State which were comparatively dearer.

An official statement explained that home manufacturers and traders were losing out in competition with their competitors in other States. There was a likelihood of investors shying away from the State, the statement added.

By taking the decision on VAT, the Chief Minister has made a clear departure from the line pursued by her predecessor Mulayam Singh. Mr. Singh had stonewalled the Union Government’s move to bring the State on the VAT table.

Union Finance Minister P. Chidambaram had met the former Chief Minister in Lucknow in 2004 and tried to impress upon him the benefits which would accrue to the State if VAT was imposed. But Mr. Singh refused to toe the Centre’s line and cited opposition from the traders’ organisations for the decision. He stuck to his stand till May this year when he lost power to Ms. Mayawati.

The Bahujan Samaj Party government’s move on VAT now follows the Chief Minister’s decision to allot the all-important Finance portfolio to one of her most trusted lieutenants, Kamla Kant Gautam, when she reshuffled her pack on Thursday.

Mr. Gautam was among the four new Cabinet Ministers inducted on Wednesday. He became the first Finance Minister of U.P. in the last seven years. So far the Finance portfolio was held by the Chief Minister.

Nand Gopal Gupta Nandi was given the Institutional Finance portfolio, while two other first-time Cabinet Ministers, Chandradev Ram Yadav and Ashok Kumar, were appointed Small Industries, and Land Development and Water Resources Ministers.

Of the four Ministers of State elevated to Cabinet rank, Rangannath Mishra was allotted the Secondary Education portfolio, Badshah Singh Labour and Abdul Mannan Science and Technology. Anant Kumar Mishra continues to hold the Medical and Health portfolio.

In the Cabinet reshuffle, Thakur Jaiveer Singh, who was earlier the Secondary Education Minister, was given the relatively insignificant portfolio of Rural Engineering Services and Agricultural Trade. Ved Ram Bhati was handed the Home Guards portfolio. He was the Labour Minister before the reshuffle.

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