The empowered committee of state finance ministers on value added tax (VAT) will continue to monitor and co-ordinate with states even after the introduction of VAT from next month across the country."The empowered committee has been registered as a society with state finance ministers as members," highly placed VAT panel sources said today.The move assumes importance as it is seen as a precursor to the process of converging VAT rates of states with the cenvat rate of the central government to arrive at a single national VAT.The ultimate aim of the government is to move from national VAT to a single Goods & Services Tax (GST).The VAT panel will be the forum for states to go for the "great bargain" with centre on integrating state-level VAT with cenvat and ultimately move on to GST.Officials said the committee would be a "permanent body" that will periodically review the progress of VAT in states, and strive to remove obstacles that may crop up in the future.The VAT panel will have to fine-tune various clauses of VAT as the need arises in the future, they added.In a changing economic scenario, the VAT panel may have to revise tax rates of a number of items, which are now of local importance but could graduate to international items like handicraft, vegetables, flowers and even some minerals."In a fast changing world, the shape and dimension of local goods itself changes. In such a scenario, the present tax matrix would need a relook," an official said.
