The Hindu Business Line : VAT panel working on harmonised 8-digit code

THE value-added tax panel would strive to harmonise the eight-digit item code being developed by it with the eight-digit item codes already adopted for excise and Customs purposes, said Mr Ramesh Chandra, Member Secretary of the Empowered Committee of State Finance Ministers on VAT.

This effort towards the harmonisation of item codes would facilitate the move towards national-level VAT on goods, whenever the country decides tomove over to that system.

Sales tax commissioners (VAT commissioners) are working towards an eight-digit Harmonised System of Nomenclature (HSN) code that could be adopted in a computerised environment. "Our effort would be to come up with a code for everything that can be sold and not merely the 550 items that are covered under the VAT system," Mr Chandra told Business Line.

He said the adoption of a computer-friendly HSN code would benefit both the tax authorities and traders. The adoption of the code would not be imposed on any trader and would be optional.

Mr Chandra had a meeting with the Sales Tax commissioners of 16 States on Friday. The HSN code was discussed at the meeting. Indications are that the non-VAT States would also go in for the eight-digit code. Sales tax commissioners of certain States that are yet to implement VAT— Gujarat, Rajasthan, Uttar Pradesh, Tamil Nadu and Madhya Pradesh — also attended the meeting.

Asked if whether there had been was any progress towards VAT implementation in the eight non-VAT States, Mr Chandra replied in the negative. Gujarat, Rajasthan, Uttar Pradesh, Tamil Nadu, Madhya Pradesh, Uttaranchal, Chattisgarh and Jharkhand are yet to implement VAT.

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