K.R. Srivats

New Delhi, Oct. 2

THE trial run for the tax information exchange system (TINXSYS) project has now been postponed to October 5. The launch of the project will coincide with the meeting of the empowered committee of State Finance Ministers on value-added tax (VAT), which is to be held here on October 5.

There were at least seven States that were looking to participate in the trial run that was to kick-off on October 1. "We felt that it would be appropriate to launch the trial runs at the hands of the Finance Ministers of the States, when they meet on October 5. This prompted a change in launch dates," Mr Ramesh Chandra, Member Secretary of the VAT panel told Business Line.

The TINXSYS project is being implemented to primarily facilitate information exchange between the sales tax/VAT departments across the country. It would also help establish a database for all inter-State transactions.

It is expected that at least thirteen States would come together for the trial run of the project by mid-October.

Meanwhile, a senior VAT panel official said that it was very unlikely that State Finance Ministers would agree to VAT rate changes at this juncture even though various Central ministries continued to write to the VAT panel seeking certain changes in the VAT rates.

"The communication of these ministries will certainly be taken up and discussed by the Empowered Committee on October 5. But I don't think the Ministers will readily agree for any changes now," Mr Chandra said.

The VAT regime came into force on April 1, this year with 23 States and union territories implementing it. The VAT panel has also received requests that perishable food items be exempted from VAT.

(This article was published in the Business Line print edition dated October 3, 2005)
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