States agree to work out Vat losses as per new formula
All 21 states implementing value added tax (Vat) on Saturday agreed to the Union finance ministry proposal to work out the compensation for any Vat-induced revenue de-growth after factoring in the floor rates ratified at the April 27 meeting of the empowered committee.
The Centre earlier wanted the November 4 formula to determine the compensation amounts.
On April 27, the empowered committee had enlarged the exemption list and brought all industrial inputs, capital goods and medical equipment under merit rate of 4%.
Saturday’s meeting of the committee also took note of the tendency among “some industries” not to pass Vat benefit (lower incidence) on to the consumers, and decided to call a meeting of these industries within a fortnight.
More: financialexpress.com