New Delhi: The Confederation of all India Traders today slammed the central government saying it had failed to honour its commitments made in the white paper on value-added tax.

Praveen Khandelwal, secretary-general, CAIT, said, "This has resulted in different states setting different rates for the same item leading to loss of business for traders," he said while releasing a note on "Nine months of the VAT".

The body has proposed setting up of a special working group to remove VAT disparities that have emerged in states.

For example, one per cent VAT was decided for gold but Rajasthan went ahead with 0.25 per cent and Uttar Pradesh with 0.15 per cent. Delhi has recently changed its rate from one per cent to 0.1 per cent. In hardware, Delhi has a 4 per cent rate but Punjab has 12.5 per cent.

Khandelwal also criticised the government for its failure to bring dealers within the VAT network. The revenue department is charging dealers with a fine of Rs10,000 even if there is any error in VAT returns. This only needed rectification and did not call for a fine, he said.