Industrial incentives to continue in VAT regime, decides panel
By Our Economy Bureau | 24 Apr 2003
New Delhi: The empowered committee of state finance ministers on value-added tax (VAT) has decided to allow states that had adopted the sales tax exemption scheme to continue with the scheme even after the implementation of a VAT regime.
This move, which is a bonanza for large sections of industry, comes on the back of the recent efforts of the industrially-rich western states of Maharashtra and Gujarat, which were making a case, under industry pressure, for the retention of the exemption scheme.
The empowered committee had earlier taken a decision that all states that had adopted the exemption scheme, prior to the implementation of VAT, would have to move to a deferral scheme after the implementation of VAT.
"All incentives in the pre-VAT regime will continue in the post-VAT regime. The commitments made by the states to the industrial units will be honoured, but without disturbing the VAT chain. The earlier decision of converting exemption schemes to deferral schemes will not be applicable as states have now decided to retain exemption schemes," says Ashim Dasgupta, the chairman of the empowered committee.
