The Hindu : CM to seek clarification on VAT regime

Online edition of India's National Newspaper
Wednesday, Mar 12, 2003

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CM to seek clarification on VAT regime

By Our Staff Reporter

NEW DELHI MARCH 11. Stating that the Delhi Government is yet to take a final decision on introduction of the Value Added Tax regime from April 1, the Chief Minister, Sheila Dikshit, said today that she was seeking a meeting with the Union Finance Minister, Jaswant Singh, to get a clarification about the Centre's stand on the new taxation system.

Talking to The Hindu, Ms. Dikshit said that what had created confusion in the minds of the public, traders and her Government was that while the local BJP leadership was opposing implementation of VAT by addressing protest rallies across the Capital, the Vajpayee Government had directed the State Governments to go ahead with enforcement of the new regime. "The BJP cannot adopt two stands on the issue. They have to come clear as to what they stand for. They cannot oppose it at the local level while their Government is bent upon enforcing it at the Central level. Instead of addressing rallies, they should talk to their Government and work in the interests of the people,'' she added.

Ms. Dikshit, who held a meeting of trade representatives including officials to work out a strategy on VAT, said the Government had taken note of the fact that majority of the protest meetings on VAT were being addressed by the BJP leaders. It was felt that the BJP leaders should not be allowed to get away with double standards. "I will be approaching the Finance Minister to seek a clarification on the VAT issue with regard to Delhi. A final decision would be taken only after we interact with the Union Government and find a way out,'' she stated.

The Finance Minister, Mahinder Singh Saathi, and the Chief Secretary, Shailja Chandra, were present at the meeting and gave their opinions on the subject. At the same time, Ms. Dikshit made it clear that the Congress Government would at no point of time compromise on the interests of Delhiites. The distributive character of Delhi will not be allowed to be disturbed and it will also be ensured that people do not face any harassment or hardships due to implementation of VAT. The Government is open to suggestions of various sections and all this will be kept in mind while taking a final decision. But at no point will the State Government rush with the new regime as it had already faced a difficult situation when the Uniform Sales Tax regime was enforced.

Ms. Dikshit said her Government would also be watching the situation with regard to the neighbouring States and see how they go about with the implementation of the new system.

She said one of the major points of great concern to the Delhi Government was the sudden increase in the tax rate on certain commodities of mass consumption that would take place with the implementation of VAT. The commodities, which presently are paying at the rate of around four per cent would be suddenly shifted to the revenue neutral rate of 12.5 per cent. " This is something that is bothering us and we would like to clarify this point which was of great importance to Delhi before taking any final decision," she added.

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