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VAT panel to discuss
August, 22nd 2009

With barely seven months left for scheduled introduction of GST, states finance ministers will deliberate tomorrow on broad design of the new indirect tax system, but is likely to skip the issue of reduction of sales tax on ATF, as demanded by aviation sector.

The meeting is not likely to discuss the rate of GST, but broad contours of it, official sources said. That stage has not come to discuss the rate, they said. The meeting is likely to discuss the probable number of goods and services to be covered unde r the new tax system, they added.

Already, a consensus has been reached to have dual model of Goods and Services Tax (GST), that is both the Centre and states will impose the new tax. Alternative model could have been to allow the Centre to collect GST which could then be distributed amo ng the states and the Union Government.

But the states did not agree for this, and hence agreement was reached on dual model. The GST, proposed to be introduced from April 1, 2010, would broadly replace excise duty and service tax at the Centre and sales tax at the state level.

Agenda of the meeting of VAT panel does not include reduction of sales tax on jet fuel, even as the beleaguered aviation industry is calling for their cuts, the sources said.

There is nothing to discuss on the issue. We are very clear on this (reducing sales tax on ATF), the sources said.

 
 
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