No change in VAT tax slab for a year
The VAT panel has ruled out altering tax slabs for one year as demanded by some states like Uttar Pradesh and Delhi, saying frequent changes in tax categories would lead to collapse of the new tax system.
Uttar Pradesh and Delhi raised the demand at the Empowered Committee meeting on April 26 to add one more rate of 6 or 8 per cent in between the existing 4 and 12.5 per cent in the VAT system, sources said.
But they were told that it was not possible to have three main rates so soon since VAT was implemented by 21 states from April only.
In fact, Uttar Pradesh has included it in one of its demands for switching over to the new regime from the existing sale tax regime. UP Agriculture Minister Ashok Bajpai, the state representative in the VAT panel, said three main rates would make it smooth for Lucknow to opt for the new tax system.
There are items under 6-7 per cent sales tax in the state. “If we increase the rate on them to 12.5 per cent in VAT, producers, traders and consumers will be affected. And if we reduce it to 4 per cent, the state will suffer loss,” he added.
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