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"Most of the larger States such as Maharashtra, Gujarat, Karnataka and Tamil Nadu are fully prepared to implement VAT from April 1."

KOLKATA, March 6

THE implementation schedule for the value-added tax (VAT) regime, as announced by the Union Finance Minister, Mr Jaswant Singh, in his Budget speech, is not being disturbed and the States are going ahead with it from April 1.

Talking to Business Line after an interactive session on implications of VAT organised by the Indian Chamber of Commerce here today, Mr C.M. Bachawat, Commissioner of Commercial Taxes, West Bengal, said " as far as my knowledge goes, VAT implementation date has not been deferred''. On West Bengal, he said there was no deferment of VAT from the scheduled date, as no information to the contrary has come from the Empowered Committee, as of now. The chairman of the committee is Dr Asim Dasgupta, the State Finance Minister.

Mr Bachawat said most of the larger States such as Maharashtra, Gujarat, Karnataka and Tamil Nadu were fully prepared to implement VAT from April 1. Asked if it could be implemented on a piecemeal basis, like some States going ahead with it from April 1, and some others joining when they are ready, he declined to comment.

Outlining the planned VAT schedule for West Bengal, he said the Presidential assent to the proposals was expected within a day or two. He informed that the Bill was likely to be forwarded to the State Assembly by next week, and it may be placed in the Assembly session most probably by mid March. "We are prepared to implement VAT from April 1," he pointed out.

He said a Special VAT cell has already been set up at the Commercial Taxes Directorate, and help counters will become functional from March 20. He urged the industry and trade to direct all VAT-related queries to this cell from March 20. VAT rules will be available for study once it is placed in the Assembly, he added.

Explaining the intricacies of tax credit and methodology set off to representatives of trade and industry at the interactive session, Mr Bachawat said many thorny issues like inter-State sales or VAT treatment of consignment transfers or immediate set-off for small capital goods sales are being discussed and a decision would be taken soon. He assured the tea and jute sectors that their problems with regard to VAT (specific to auction sales) would be looked into carefully. Stock valuation, he clarified, will be based on accepted method of accounting.

He said VAT is tax-invoice based and a pro forma is being prescribed for use by registered dealers. Registration is being made compulsory for all dealers having a gross sales turnover of Rs 5 lakh, and existing registered dealers would automatically be integrated into VAT.

An 11 digit Tax Identification Number (TIN) is going to be implemented throughout the country. The key rates in West Bengal, h

e said, would be 4 per cent and 12.5 per cent, with export sector being zero-rated.

Explaining the various facets of both Cenvat and State VAT, Dr Arvind Virmani, Director, Indian Council for Research on International Economic Relations (ICRIER), New Delhi, and an expert on VAT, said the inter-State input set off system in VAT has to be organised much more carefully.

He said for VAT to emerge as an equitable tax, it has to be ensured that no other tax on goods and services is levied. The field has to be level, and service tax has to be fully integrated into VAT, he pointed out.

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