Bengal promises VAT changes in 30 days

The government of West Bengal (GoWB) will soon notify the necessary amendments in its existing legislation so that the West Bengal value added tax (VAT) Bill, 2003 is in accordance with the 19 points of commonality as prescribed by the empowered committee of state finance ministers, according to Asim Dasgupta, minister of finance, GoWB, and chairman of the national VAT committee.

Participating in an interactive session on 'Value added tax: Implications' organised by Bharat Chamber of Commerce, he said within a month the state government would come up with the required amendments primarily pertaining to the rules, and if necessary to some existing laws, as well.

"The state shall put the amended draft in the form of an ordinance and issue it within next 30 days. In fact other states, which have not prepared papers regarding to VAT to place before the state assembly there can come up with their respective amended drafts for clearance from the empowered committee so that it can be speedily forwarded for presidential assent", said Dasgupta.

Dasgupta also urged the major chambers of commerce and industry, trade association and also district level representatives to forward their views on the proposed amendments.

Dasgupta said the chances of successful implementation of VAT this time was very high.

"All the 28 states and one Union territory with its elected government is quite prepared for implementation of VAT from 1st April, 2005. The discussion with Uttar Pradesh regarding VAT has been positive. All the states have also started working on the required amendments on the VAT rules in their own states", Dasgupta claimed.

Dasgupta said the proposed white paper addressing the traders and industry regarding the VAT was nearly complete after discussions with trade bodies and apex chambers.

Explaining the uniqueness of the proposed structure of VAT in India, Dasgupta said that unlike other economies like Brazil, Canada and the European Union, the proposed VAT regime incorporated the road map for progressive abolition of central sales tax, which is seen as a major obstacle.

"There has been instances in India, like Haryana, where implementation of VAT has resulted in increase in revenue to the state. It reduces tax burden by removing the problem of double counting and also substantially contributes to lowering of commodity price benefiting consumers on a whole", explained Dasgupta.

The proposed transformation to the self assessment mechanism from the existing complex inspection mechanism is another uniqueness of the proposed VAT structure, said Dasgupta.

"The returns need to be self-assessed and also backed up by proper documentation. It will reduce harassment, which is a part of the existing system, and being backed by proper documentation as required for tax set off, minimise the scope for evasion", claimed Dasgupta.