Finance ministers to meet in Jan over VAT

In a bid to chart a new roadmap for the implementation of the value added tax (VAT), the empowered committee of state finance ministers on VAT is expected to meet in January.

After three postponements, the committee would discuss the issues that led to VAT being put on the backburner, officials said.

The pending issues, to be taken up at the meeting, includes the formula for the compensation package to be given by the Centre once states shift to the VAT regime.

Several industrial states had expressed their readiness to switch over to the new tax regime, officials said.

In its last meeting in July, after the postponement of the VAT schedule, the Committee had endorsed the Centre's stand to implement the new tax regime only after arriving at a "national consensus" on the issue with major political parties.

"The timing and details of VAT implementation will be worked out once the discussion with political parties is concluded," an official said.

The states' request for a partial introduction of VAT had earlier been rejected by the Centre. After failing to meet the June deadline, the Centre said it was against the "patchwork" approach of states in phasing out Central Sales Tax or on the compensation for revenue loss after VAT.

In all, 22 states had sent in their VAT bills to the Centre for Presidential assent, following which there was the need for amendments in most of them.