Only 9 states ready with their VAT bills
New Delhi: Chairman of the empowered committee Asim Dasgupta met finance minister Jaswant Singh on Wednesday to discuss ways of putting in place the new tax regime at the earliest and asked the Centre to expedite clearance of state VAT (value added tax) legislations. “Only nine states are ready with their VAT bills,” Dasgupta said after the meeting, adding that seven other states were in an advanced stage of firming up their VAT bills. He declined to comment on whether the deadline for VAT would be extended as the Centre was not in favour of a “patch-work” approach of implementing VAT, which is expected to improve revenue collection of states. Finance ministry sources said states have been advised to send their VAT bills within this week, as it takes a minimum of 21 days to get President’s nod.
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LS okays Fiscal Responsibility Bill
New Delhi: The Lok Sabha on Wednesday passed the watered down Fiscal Responsibility and Budget Management (FRBM) Bill in Lok Sabha. Unlike the original draft, the new Bill sets no annual targets for reduction of fiscal deficit. It only enjoins the govt to eliminate revenue deficit by March 31, 2008. Originally the Bill had proposed to reduce fiscal and revenue deficits by 0.5 per cent of the GDP annually to bring down fiscal deficit to two per cent of GDP and eliminate revenue deficit by 2005-06. As per the diluted Bill, the govt will take appropriate measures to reduce fiscal deficit and revenue deficit so as to eliminate revenue deficit by 2007-08 and then build up revenue surplus. It does not provide any targeted annual reduction of deficits. Winding up the discussion, finance minister Jaswant Singh said legislation alone was not enough to bring about fiscal discipline. This could be brought about only through self-discipline of all including the centre and states.
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