The Hindu Business Line : Gujarat likely to implement VAT soon

Speaking at an interactive session organised by the Merchants Chamber of Commerce here on Saturday,Mr Anilbhai Patel, Minister for Industries, Mines & Minerals, Gujarat, said all the BJP-ruled States were now reviewing the VAT situation jointly, and would soon join the VAT regime.

The Minister, now touring in West Bengal, is heading a 15-member high-power State delegation, scouting for investments in Gujarat in both manufacturing, including power and gas, and the services sector.

"In terms of VAT provisions and other related legislation, we are fully ready, and once a decision is taken at the apex level, we will implement VAT without any further delay," the Minister said. He, however, did not spell out a timeframe within which this will happen. The Minister also disclosed that Gujarat had asked the Centre to prepare a White Paper based on the experience of the VAT-compliant States.

Tax reforms: He said Gujarat's commitment to tax reforms was industry-friendly, and highly focused on rationalisation, simplification, transparency and harmonisation in rate structure. The reforms in sales tax carried out so far were in sync with the Government's commitment to introduce VAT at the appropriate time. The State had already abolished turnover tax and the number of sales tax (main) slabs had been reduced from 17 to six now.

Investment hotspot: Describing Gujarat as the world's investment hotspot, Mr Patel said at the Vibrant Gujarat - Global Investors Summit 2005, MoUs (investment proposals) valued at around $24 billion (Rs 1,06,160 crore) were signed, mainly in sectors such as power (Rs 38,000 crore), engineering and auto (Rs 16,451 crore), ports (Rs 15,585 crore), oil and gas (Rs 13,287 crore), urban development (Rs 9,100 crore), tourism (Rs 7,351 crore) and chemicals (Rs 3,645 crore).

The Global Investors' Summit-2003 had attracted investments of over Rs 66,000 crore ($14 billion). The Minister urged Bengal-based businesses to invest in Gujarat, which was clocking an industrial growth of around 15 per cent consistently for the last three years. Gujarat enjoys the highest State GDP of over 10 per cent, against the national average of around seven per cent.

Pointing out that private capital has flourished in Gujarat, Mr Patel said sector-specific industrial estates had been set up. The largest number of new SEZs (13 in all) were coming up in Gujarat now, which already houses the country's largest multi-product SEZ at Kandla, he said. Path-breaking labour reforms (labour flexibility) hadbeen introduced in the new SEZs and industrial parks.

Labour laws: The State Government has proposed, through an Ordinance, certain flexibilities in compliance of labour laws under different sections of the Industrial Disputes Act. The Minister, however, clarified that labour interests would be fully protected.

On the issue of privatisation of State PSUs, Mr Patel said a high-powered committee had been set up by the State Government to examine the issue in its entirety.

According to Mr D. Rajagopalan, Principal Secretary, Industry and Mines, Government of Gujarat, there were around 19 state PSUs, out of which the commercially-run units were now making profits.

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