VAT panel wants finance ministry to monitor prices
The empowered committee on VAT has requested the finance ministry and other other ministries concerned to monitor price level of VAT commodities even though general prices have come down after the new tax regime was implemented in 21 states.
The consumer price index has come down from 5 per cent in April to 3.7 per cent in May and further to 3.3 per cent in June, Empowered Committee Chairman Asim Dasgupta said after the VAT panel meeting on Wednesday.
But the committee is concerned in cases where prices have risen even after reduction in VAT rates compared to sales taxes. ‘‘Index is an average concept. Prices of some commodities have risen. We are particularly concerned about those commodities, where prices have gone up despite reduction in VAT rates,’’ Dasgupta said.
He said the panel has requested finance ministry officials and other ministries concerned to hold meetings to monitor prices of VAT commodities. On passing the benefits by manufacturers to the next stage, he said it is not happening countrywide.
To a query whether punitive action would be taken against those not factoring in VAT in maximum retail prices (MRP), Dasgupta said the panel would recommend such action only after discussions with the finance ministry. However, persuasive efforts do also bear fruits, he added.
Besides prices, another issue affecting quality of VAT is non-issuance of cash memos and invoices, he said, adding trade associations and chambers have assured the VAT panel that they would be cooperating with it on this matter. He said revenues of states have gone up after the implementation of VAT.