Panel agrees to implement VAT in few months
New Delhi: The empowered committee on value-added tax (VAT) has agreed with the central government's plan for a nationwide VAT implementation within few months. This decision was made in consultation with political parties at a national consensus. “It’s a very major decision for India as a whole. When we introduce it, we want the acceptance to be total,” said VAT panel chairman and West Bengal finance minister Asim Dasgupta. The move comes as a climb-down from the panel’s previous stance that VAT could be introduced in about 11 states, accounting for two-thirds of India’s trade and industry, at the first stage. Indian states’ plea for a partial introduction of VAT was outrightly rejected by the central government with Union Finance Minister Jaswant Singh disfavouring a “patchwork” approach in phasing out central sales tax or doling out relief to states, which expected revenue loss after VAT implementation. Declining to set any new timeframe as done before, Dasgupta said the panel will meet Singh within a fortnight to set the date of meeting with major political parties.
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