The Hindu Business Line : `VAT law variations to be resolved latest by April 26'

STATE Finance Ministers who met here today under the aegis of the Empowered Committee of State Finance Ministers on Value Added Tax (VAT) have set an "outer limit" of April 26 for resolving the "variations" that had crept into some of the VAT legislations of the 21 States that had so far implemented the new tax system.

"We have reached a consensus on how to resolve the differences amicably. There would be more discussions among the States, and all variations would be resolved by the 26th of this month," Dr Asim Dasgupta, Chairman of the Empowered Committee, told reporters after a four-hour long meeting of the VAT panel in the Capital today.

Dr Dasgupta held that variations in VAT rates have not been significant if one were to consider the 21 States as a whole. "There are, however, two States where important variations have been noticed. We will resolve them through discussions," he said.

The Empowered Committee Chairman declined to specify the two States that had "important variations". Responding to queries on variations in VAT rates between States, Dr Dasgupta elaborated the case of "foodgrains" where such a trend was noticed.

He pointed out that the Empowered Committee had given an option to States to either exempt foodgrains from VAT or levy a 4 per cent VAT rate.

"This then led to the issue of definition of foodgrain. While some States have sincerely taken only wheat and rice to be foodgrains, some others have considered maida, attaa and sooji as foodgrains and acted accordingly. States have now sought clarifications of the empowered committee on the definition of foodgrains," Dr Dasgupta said.

He also admitted that the empowered committee deliberated the Delhi Government's concern on the loss of trade on diesel over the last 15 days. An appropriate solution would be worked out by April 26 after discussion with the States concerned.

Meanwhile, the Confederation of All India Traders (CAIT) General Secretary, Mr Praveen Khandelwal, today refuted the claims of the Empowered Committee that the variations in VAT rates were not significant. "There are wide disparities in the VAT rates for a number of items," he said. CAIT plans to soon come up with a detailed list of items with different VAT rates in various States.

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