Essential items under VAT differ across states

The trade body Confederation of All India Traders (CAIT) has stated that the VAT rates of essential items like atta, maida, tea, cereal and pulses are showing glaring differences across the states.

Even capital goods, tools and stationary products show a difference of 8.5% in states like Delhi, West Bengal, Maharashtra, Andhra Pradesh and Punjab.

According to CAIT, states like West Bengal and Delhi have exempted atta, maida, cereals and pulses fully while Punjab, Andhra Pradesh, Bihar and Jammu and Kashmir have imposed 4% VAT on these items.

The Empowered Committee has given states the option to either exempt fully foodgrains or impose 4% on them.

However, the VAT panel's chairman Asim Dasgupta is not clear whether to treat atta, maida, cereals and pulses as "foodgrains".

Similarly, some states have taken the advantage of the option to impose either 4 or 12.5% VAT on tea. As a result, tea attracts 4% VAT in West Bengal, Delhi and Jammu and Kashmir, while it is attracting 12.5% in Punjab, Maharashtra, Bihar and Andhra Pradesh.