The Hindu Business Line : Tax revenues of VAT States up 15.3 pc in Q1

THE tax revenues of value-added tax (VAT) implementing States and Union Territories have increased by 15.3 per cent during the first quarter of the current fiscal, the Union Finance Minister, Mr P. Chidamabarm, told the Rajya Sabha here on Tuesday.

Replying to supplementaries during Question Hour, the Finance Minister also said that studies undertaken by trade bodies showed that the introduction of VAT did not have any adverse effect on consumer prices.

Mr Chidambaram made it clear that no conclusion can be reached about the effect or success of VAT based on the tax revenues of the first quarter. The gross tax revenues (provisional) of the 22 States/UTs that had implemented VAT from April 1 stood at Rs 14,050.81 crore during April-June 2005 against tax revenue of Rs 12,184.31 crore recorded in the corresponding period last year. This includes collection from non-VAT items.

To a query on delay on part of Uttar Pradesh and Gujarat in implementation of VAT, Mr Chidambaram expressed confidence that both the States could be persuaded to switch over to the new tax system.

The Finance Minister said that he was ready to meet the Chief Ministers of both the States anywhere and anytime to allay all their apprehensions regarding VAT. He also gave an assurance that the Centre would compensate the States for losses, if any, arising from the introduction of State-level VAT.

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