The Hindu Business Line : 7-member expert panel appointed for VAT implementation

THE Government has announced the constitution of a seven-member Expert Technical Committee for ensuring smooth implementation of value added tax (VAT) from April 1, 2005.

The Committee, appointed by the Finance Ministry, comprises Dr Govinda Rao, Director, National Institute of Public Finance and Policy (NIPFP); Mr P.V. Rajaraman, former Tamil Nadu Finance Secretary; Mr Ramesh Chandra, Member Secretary, Empowered Committee of State Finance Ministers along with Ms Renuka Vishwanathan, Advisor, Planning Commission. Other members of the committee are Mr C.M. Bachhawat, West Bengal Commissioner of Commercial Taxes; Mr M. N. Joshi, Additional Secretary, Finance, Gujarat Government; and Ms R. Kavita Rao, Fellow, NIPFP, an official release said here.

The Committee has been appointed for a term till June 30, 2005, and the period could be further extended on the basis of the requirements of state governments, the release said. The Director, State Taxes, Ministry of Finance, will be the convenor of the Committee.

The terms of reference of the committee include steps to ensure that VAT is revenue enhancing, principles and levels of compensation to be paid to States for revenue loss, if any, due to the implementation of VAT, besides transitional issues emerging in the context of switching over to the new regime. The Committee, in addition, may take up any other issue referred to it by the Ministry of Finance or the Empowered Committee of State Finance Ministers.

The other terms of reference for the Expert Committee include working out modalities for phasing out Central Sales Tax, strategy for training and publicity for implementation of VAT and tackling transitional legal and administrative issues, which would emerge in the context of switchover to VAT.

The Finance Minister, Mr P. Chidambaram, in his Budget speech earlier this month, had announced the setting up of the Committee for interfacing with State Governments on VAT implementation. The Empowered Committee of State Finance Ministers had resolved, on June 18, 2004, to introduce VAT at the State level from April 2005.

"VAT, being a State subject, the Central Government has been acting as a facilitator for it successful launching and implementation,'' the release said.