The Hindu Business Line : Bidis, raw tobacco leaves out of VAT levy

Legislative changes With States now having power to levy more than 4 per cent VAT on tobacco, many of them are in the process of bringing about necessary legislative changes to impose VAT (mostly 12.5 per cent) on tobacco.

New Delhi April 14 Bidis, raw tobacco leaves and tobacco leaves used for making bidis would be kept out of the ambit of State-level value added tax (VAT), the Empowered Committee of State Finance ministers on VAT has decided.

The VAT panel at its meeting on Saturday also decided to give some transition time (say one month) to tobacco product manufacturers to clear stocks that were existing before VAT levy, without payment of VAT. States have been given the leeway to decide the timeframe by when the manufacturers should clear these stocks. With States now having power to levy more than 4 per cent VAT on tobacco, many of them are in the process of bringing about necessary legislative changes to impose VAT (mostly 12.5 per cent) on tobacco.

Meeting on May 5

Meanwhile, the Chairman of the Empowered Committee of State Finance Ministers on VAT, Dr Asim Dasgupta, told reporters that a joint working group would be set up to work towards the proposed goods and services tax (GST), which is likely to be introduced from April 1, 2010. Mr Dasgupta said the Empowered Committee would meet again on May 5 to take this forward and decide on the terms of reference of the joint working group.

He also said that States would, at their meeting on May 5, strive to decide on the 44 services that could be brought under the service tax net and the proceeds could be obtained by the States as part of the compensation for phase-out of central sales tax (CST). Already, from April 1 this year, the Centre has agreed to transfer 100 per cent of the collection proceeds of 33 specified taxable services to the States.

More Stories on : Taxation | Policy | Climate & Weather | Cigarettes

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Opportunities for pvt sector in defence: Antony

Project work on Delhi-Mumbai industrial corridor by Jan

HCC eyes setting up more nuclear reactors

More power cut for units in Maharashtra

Bidis, raw tobacco leaves out of VAT levy

Fabindia is now a Harvard case study

German research body expanding presence in India

FICCI seeks sops for food processing

FDI inflow trebles; new target $25 b