New Delhi, April 8
The proposed implementation of value-added tax (VAT) has been postponed by two more months, with the Empowered Committee of State Finance Ministers deciding to implement the new tax structure from June 1.

The Union Finance Minister, Mr Jaswant Singh, has, meanwhile, sought to clarify that the Centre is not forcing the implementation of VAT by the states, but only acting as a facilitator to implement the new tax regime.

The minister said this when a five-member committee of the Bharatiya Janata Party led by Parliamentary Party spokesman, Mr V.K. Malhotra, called on him to apprise him of the “disenchantment” of the trading community.

The decision to implement VAT from June 1 was taken at a meeting of the Empowered Committee chaired by the West Bengal Finance Minister, Mr Asim Dasgupta.

The governments of Kerala, Maharashtra, Andhra Pradesh and Orissa have confirmed the implementation of VAT from June 1.

The Revenue Secretary, Mr C.S. Rao, told newspersons here that the Centre had assured the states of compensation in case of revenue loss due to switching over to VAT.

The Centre has also assured the state governments that it would cut the Central sales tax from 4 per cent to 2 per cent after a comprehensive VAT is put in place across the country.

Today’s meeting of the Empowered Committee was preceded by an informal meeting of state officials. Reportedly, the decision to defer the implementation of VAT was based upon the inputs from the state officials and several states indicated that they would be in a position to implement the new taxation system if more time was given.

As of now, only seven states — Gujarat, Kerala, Madhya Pradesh, Karnataka, Maharashtra, West Bengal and Andhra Pradesh — have sent their state VAT legislations for Presidential assent. Of these, only Madhya Pradesh has received the Presidential assent.