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New Delhi
By Sujay Mehdudia
Sources in the Delhi Government say that irrespective of the eventual outcome of the crucial meeting of the Empowered Committee, whose convener is the West Bengal Finance Minister, Asim Dasgupta, the Delhi Government is likely to take a stand that under the given circumstance it is not possible for the authorities in the Capital to go ahead with imposition of VAT. Asked about the strategy he would adopt at tomorrow's meeting being held at the Players Building, the headquarters of the Empowered Committee, the Delhi Finance Minister, Mahinder Singh Saathi, said he would take an aggressive stand with regard to the grievances and fears of Delhi and seek to protect its "distributive character''. Officials in the Finance Department said the first and foremost issue of dispute is the calculation of RNR which is likely to severely affect the trade in the Delhi and put at a disadvantage in relation to other States. Not only this, there is likely possibility that the priceline of majority of commodities would witness an increase if the present VAT RNR and other provisions come into effect. At present, majority of the commodities in Delhi face a sales tax rate of 4 to 8 per cent. But after VAT is adopted, they would fall into the category of 12.5 per cent RNR which would make things very difficult. The Empowered Committee would be impressed upon to re-calculate the RNR to suit the needs and requirements of Delhi trade otherwise the present situation in unacceptable to us, a senior official remarked. On the other hand, officials point out that what has irked the Delhi Government is the attitude of Central Government and BJP on VAT. The Sheila Dikshit Government is expected to expose the double standards being adopted by BJP on the issue and seek a clear mandate from the Empowered Committee. The Finance Minister would seek to put across the point that while on one hand the BJP-led Central Government was issuing directives for implementation of VAT to the States, while on the other hand, its own local BJP unit was opposing it. Not only this, they were taking part in anti-VAT agitations and provoking traders into direct action in attempt to show the Sheila Dikshit Government in poor light. A situation has been created by the BJP leaders in Delhi where it is not feasible to go ahead with VAT. Similarly, the Delhi Government would also seek an end to the industrial incentives being provided in shape of tax concessions by the State Governments as this would create disparity among the member States on various issues including setting up of trade and subsequent production. Sources said Mr. Saathi is likely urge the Empowered Committee to impress upon the States and the Central Government to make such incentives as part of their budget instead of the special packages. As the tax incentives including tax holidays are for a long period, it would adversely affect the trade of other States and in that context Delhi would placed at an disadvantage as compared to Himachal Pradesh, Haryana, Punjab and even Uttar Pradesh.
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