Delhi, Maharashtra likely to fix bullion Vat rate at 0.25%
Delhi and Maharashtra might lower valued added tax (Vat) rate on bullion to 0.25%, as consensus on introducing uniform floor rate for precious metals seemed difficult to be arrived at in the empowered committee’s meeting on Wednesday.
“At the moment, consensus does not seem to be emerging on the issue at the Vat panel’s meeting on Wednesday. If that happens, we will reduce Vat rate on bullion to 0.25%,” Delhi finance minister AK Walia said during the meeting of the sales tax commissioners of the Vat-implementing states here.
“We will first try to evolve consensus on the issue, but if that does not happen, we will be forced to lower the Vat rate on bullion,” Maharashtra sales tax commissioner BC Khatua said after the meeting.
The meeting, attended by empowered committee chairman Asim Dasgupta and secretary Ramesh Chandra, provided a forum for an interaction among sales tax commissioners of different states prior to detailed discussions with the finance minister on Wednesday.
Bullion trade is shifting from Delhi and Maharashtra to Rajasthan and Gujarat because of the difference in the tax structure on precious metals.
While Delhi and Maharashtra have 1% Vat rate on bullion, Rajasthan and Gujarat levy 0.25% sales tax on it.