The Hindu Business Line : `Incentive' for States to join VAT regime

THE Empowered Committee of State Finance Ministers on Value Added Tax (VAT) is to work out a "built-in incentive" which would help those States that are not moving towards VAT from June 1 to join the bandwagon as early as possible.

At least 16 States are expected to move into a VAT regime from June 1.The Chairman of the Empowered Committee, Mr Ashim Dasgupta, declined to elaborate on the nature of such an incentive. At the same time, he maintained that it would not result in an additional burden on the Centre in any manner.

"The Centre will compensate the States for loss of revenues on account of the reduction in the central sales tax. It will also compensate the States for revenue loss, if any, on account of the movement to a VAT regime," Mr Dasgupta told presspersons on Wednesday.

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