With uncertainty looming large on implementation of value added tax (VAT), the empowered committee on VAT has convened a meeting of state finance ministers tomorrow to clear the haze and persuade Uttar Pradesh and BJP-ruled states to switch over to the new tax regime from April 1.The meeting will be attended by finance minister P Chidambaram who has promised full compensation for revenue loss for the first year of VAT implementation, sources said.Chidambaram has so far maintained that VAT will be implemented as scheduled from April 1 even if some states opt out of it.Most of the states are ready with their VAT legislations, but some of them - Uttar Pradesh, Rajasthan, Gujarat, Madhya Pradesh, Chattisgarh and Jharkhand - have expressed reservations on implementing VAT unless traders agree to it, and a clear roadmap is announced by the centre for phasing out central sales tax.It is not clear whether Bihar and Goa, which are under President's rule, will implement the new tax.The panel, headed by West Bengal finance minister Asim Dasgupta, had done the groundwork for a smooth switchover to a transparent VAT regime to ease the cascading effect of multiple taxes in states.Coming under pressure from traders and state governments, the panel had relaxed the rules to a great extent by increasing the limit to Rs 5-50 lakh for a trader to come under VAT. States have also been given the option to raise the lower limit to Rs 10 lakh.
