The government has appointed a committee to look at the revenue loss, if any, due to the introduction of the value-added tax (VAT) system in the states.
According to an official release, the panel will be headed by additional secretary (revenue). There will be 11 other members from the states and the Union finance ministry, it said.
The committee will develop a clear and measurable criteria for judging revenue loss due to the introduction of value-added tax and will make recommendations on the manner and quantum of compensation by the Centre.
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The release said that another eight-member committee headed by additional secretary (revenue) would examine the levy of VAT on services and its feasibility and modalities, taking into consideration the Govinda Rao Committee report and Parthasarathi Shome Committee report on service tax.
It will also study the legal and constitutional implications of the imposition of VAT on services.
Both the committees will submit their reports by September 30 this year, said the release.