The Hindu Business Line : VAT panel may assume quasi-judicial role

"We are thinking of empowering the Empowered Committee. Some sort of blueprint is already ready. The State Finance Ministers would have to discuss as to how this quasi-judicial role should be conferred," the Member-Secretary of the Empowered Committee, Mr Ramesh Chandra, said here on Tuesday at a workshop on VAT rules.

Mr Chandra, however, added that the Empowered Committee would not need statutory powers if all the States were to adopt a consensus approach for VAT implementation and abide by the decisions of the Committee.

The current thinking of adopting a quasi-judicial role is in response to the contention from certain quarters that the panel "lacked teeth" to sort out inter-State disputes on VAT implementation.

So far, the disputes on VAT implementation had primarily centred on VAT rates or adherence to uniform floor rates. A case in point was the variation in tax rates adopted by Delhi and Haryana in the case of diesel and automotive tyres.

Meanwhile, Mr Chandra, in his address at the workshop, said that the VAT panel would need at least one more year to ensure harmonisation of rates and VAT laws. This time would also be utilised to bring the eight non-VAT States into the new tax regime.

Mr Chandra came down heavily on VAT implementation in Delhi, saying that most of the traders were not issuing invoices and were taking "consumers for a ride".

The Delhi Finance Minister, Mr A.K.Walia, who was present at the workshop, however, played down the issue by stating that the new tax system had created confusion and things would get sorted out in the coming days. "Our effort has been to make traders feel comfortable about the new system. They would now start issuing invoices," he said.

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