VAT panel meet in mid-July

The empowered committee of state finance ministers on VAT will meet by the middle of next month to discuss issues arisen after three months of implementation of the new tax regime by 21 states.

"We will meet by middle of July. The exact agenda for the meeting is being finalised," Asim Dasgupta, chairman, empowered committee said.

However, empowered committee member secretary Ramesh Chandra said the meeting will discuss compensation formula for those states making losses because of VAT implementation, impact of new tax system on prices and ways to make VAT more consumer-friendly.

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In short, implementation issues will be the agenda of the meeting, he said. When asked whether Delhi's demand for increasing VAT on automotive tyres and tubes from 8 per cent to 12 per cent in Haryana would also be discussed, Ramesh Chandra said the issue is not in the agenda but if Delhi raises the matter, it will be discussed.

In fact, Delhi Finance Minister A K Walia had assured to raise the issue of anomaly between VAT rates on tyres and tubes and between VAT and sales tax on bullion in Delhi and neighbouring states at the meeting.

The last meeting of VAT panel also gave a relief to Delhi to lower VAT on diesel from 20 per cent to 12.5 per cent after Haryana, Punjab and Himachal Pradesh refused to increase the rates to 20 per cent.