Delhi, 3 other states decide to work on uniform tax rates

In a major step, Delhi and its neighbouring states Punjab, Haryana and Himachal Pradesh today agreed to move towards uniformity in tax rates and develop a common market to boost trade.
At a meeting here, finance ministers of all four states have also agreed to set up a Zonal Economic Intelligence unit to check evasion of taxes. The meeting decided to invite Uttar Pradesh, Rajasthan, Uttarakhand and Jammu and Kashmir to join the initiative.
Officials said all the four states felt that there should be uniformity in tax rates of VAT on all goods and decided to set up the Zonal Economic Intelligence Unit should be established to avoid cross border smuggling of goods.

The meeting, aimed at bringing uniformity in tax rates, felt that due to huge variance in tax rates, Delhi and its neighbouring states are witnessing a loss of revenue.
"It was decided that there should be uniformity in tax rates of VAT on all goods, especially the goods in which trade diversion takes place with minimum difference in the sale price," the Delhi government said.
Officials said since VAT is a major source of revenue of all the four states, uniformity of taxes is essential to safeguard revenue.

Besides Delhi Deputy Chief Minister Manish Sisodia, the meeting was attended by Punjab Deputy Chief Minister Sukhbir Singh Badal, Finance Minister Parminder Singh Dhindsa, Haryana Finance Minister Captain Abhimanyu and Himachal Finance Minister Parkash Chaudhary.

The meeting took place at the initiative of who also looks after the Finance portfolio.
Officials said a committee comprising secretaries and commissioners of Finance and Taxation departments of the northern states will be formed soon to decide about the modalities to achieve uniformity in tax rates and to set up the Zonal Economic Intelligence unit.
The committee will meet within a week's time or so to finalise the matter.
"The decisions of the committee should be implemented in a time bound manner preferably within a month. Commissioner Excise and Taxation, government of Punjab will coordinate the meeting," the Delhi government said in a statement.

It said after achieving the immediate objectives, the committee would deliberate on policy matters also.
A senior official said that Delhi government also invited Uttar Pradesh Chief Minister Akhilesh Yadav to attend the meeting but he could not come as he is travelling.
Delhi Chief Minister Arvind Kejriwal welcomed the ministers and officers of the neighbouring states at the Secretariat.