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K. R. Srivats
Moumita Bakshi Chatterjee

VAT commissioners are working towards an eight-digit harmonised system of classification of items for a State-level VAT.

New Delhi , Sept. 6

THE Department of Information Technology (IT) has approached the value-added tax (VAT) panel to re-classify VAT rates on a host of IT products so as to peg them at a uniform rate of 4 per cent across the country.

"We have received a letter from the Ministry of Information Technology, asking the panel to consider a 4 per cent rate for a number of IT products. Currently, different States have categorised them under different rates," Mr Ramesh Chandra, Member Secretary, VAT panel, told Business Line here.

He said that the letter of the IT Ministry would be placed before the State Finance Ministers and it was for them to collectively take a view on this matter. Mr Chandra also highlighted that various Central ministries have been periodically writing to the VAT panel, giving their suggestions on VAT rates for different items.

When contacted, a senior official in the Department of IT (Ministry of Communications and IT) confirmed that a letter was written to the Empowered Committee of State Finance Ministers on VAT over the confusion created due to the notification of a partial list by many States.

"So, we requested VAT panel to expand the list and ensure that States notify as per the classification given in the harmonised system so that every item is included," the official said.

VAT commissioners are working towards an eight-digit harmonised system of classification of items for a State-level VAT.

Mr Chandra has been maintaining that it is not necessary for the harmonised system for VAT items to be entirely aligned with the eight-digit harmonised system code used by the Central excise authorities or even the customs authorities.

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