Despite recession impact on the State economy, the collection from value added tax (VAT) has crossed last years figures.

Finance Minister Prafulla Chandra Ghadei said after a meeting of the VAT Advisory Council here today. While collection from VAT was Rs 2,004 crore by August last year, it has touched Rs 2,041 crore during the corresponding period this year.

It was believed that resources generation from VAT and other sectors will go down because of the meltdown. However, Ghadei hoped that collection from tax and non-tax resources this year will cross last years figures marginally.

If the current trend continues, there will be no need to cutdown on the welfare measures as the financial year advances.

The State Government, however, does not intend to waive VAT on sugar and pulses to bring down the prices of these commodities which have touched sky high.

The council proposed that the rate of VAT on some goods and services should be slashed from the current 12.5 per cent to 4 per cent as a part of the rationalisation process. These include corn, groundnut oil, electronic goods, automobile products, hotels, restaurants and ply wood.

There have been demands from various business organisations and trade bodies for reduction of the rate of VAT on these. Ghadei said that a decision on this will be taken after further deliberations.

Ghadei informed the business organisations and trade bodies a decision had been taken by the Centre to impose direct sales tax from 2010.

He said that the Centre already discussed the issue with finance ministers, finance secretaries and commercial tax officials of all the states. This will be imposed after the Centre gives final guidelines after eliciting the opinion of the traders and businessmen from the State.

The council will also be reconstituted. This will comprise Chief Secretary, secretaries of Industries and some other related departments, traders and economists.

Ghadei said that as many traders and businessmen are yet to register themselves, November will be taken as the month of registration. He requested the office-bearers of the business and trade organisations to cooperate with the State Government in this regard.

Advisory committees will be constituted by the month-end in each of the 12 commercial tax ranges. The panels will meet twice a year. Problems faced by traders, VAT collection and registration of businessmen will be taken up at these meetings.

The State Government has decided to introduce e-payment system in the next six months.