Members
of Parliament cutting across party lines today expressed their
strong support for the introduction and implementation of Value
Added Tax (VAT) in all States and Union Territories in the country
w.e.f. April 1, 2003. In the meeting of the Consultative Committee
of Members of Parliament attached to the Ministry of Finance and
Company Affairs, Members of Parliament congratulated the Union
Finance Minister on the progress made in creating confidence and
building consensus among State Governments for the implementation
of VAT. MPs stated that this initiative would benefit all the
States and the country.
Addressing the
meeting, the Union Minister of Finance and Company Affairs,
Shri Jaswant Singh emphasized that the introduction of State
level VAT was one of the most important fiscal reforms which
would make the commodity taxation system simpler and more transparent
and was also expected to improve the revenues of the States.
He said VAT could be implemented only with the full cooperation
of all States and Union Territories. He urged the Members of
Parliament for their support in strengthening the consensus
and sustaining the momentum that had already been created.
The Minister stated
that with a view to ensuring least disruption in the process
of transition from the current system to the Value Added Tax,
the Central Government had assured the States 100 per cent compensation
of possible revenue loss in the first year i.e., 2003-04, and
at the rate of 75 per cent and 50 per cent for the next two
years. The Minister also apprised the Committee of the details
of the steps being taken by the Central Government to augment
the revenues of the States through tax on services and on items
subject to additional duties of excise.
The Minister, however,
noted that there were still some concerns and apprehensions
about the phasing out of Central Sales Tax and its impact on
revenues of the States. Several Members of Parliament emphasized
the need for a quick phase-out of the Central Sales Tax, so
that the full benefits of the VAT could be realized by the people
in all States, including the less industrialized States. The
Minister assured the Members that a decision in this regard
would be taken soon. Members also suggested that there should
be uniformity in the legislations enacted by the States.
Shri Jaswant Singh
said that he would convene a meeting of the Members of the Consultative
Committee and the Empowered Committee of State Finance Ministers
to facilitate a better mutual understanding of all issues. The
Minister added that a nationwide information and awareness campaign
was being taken up with special emphasis on dissemination in
the regional languages for better awareness and understanding
of the VAT system.
The Meeting was
attended by Shri A. Adsul and Shri G.N. Ramachandran, Ministers
of State for Finance. Members of Parliament who attended the
meeting were Dr. Manmohan Singh, Dr. Nitish Sengupta, Dr. Jaswant
Singh Yadav, Shri Vijay Kumar Khandelwal, Shri Ravi Prakash
Verma, Shri Trilochan Kanungo, Shri Nawal Kishore Rai, Shri
Sontosh Mohan Dev, Shri Kirit Somaiya, Smt. Renuka Chowdhury,
Shri C.P. Thirunavukkarasu, Shri Lalitbhai Mehta, Shri Abani
Roy, Shri R.P. Goenka, Shri Baijayant Panda, Shri Rajeev Shukla,
Shri Eknath Thakur, Shri Harendra Singh Mallik, Shri Murli S.
Deora and Shri Santosh Bagrodia.
