New Delhi, April 26
All 21 states which have migrated to Value-Added Tax (VAT) today arrived at a consensus to adopt uniform rates of VAT for industrial inputs, capital goods, essential commodities and medicines.
“It has been possible to arrive at a consensus among states on convergence of VAT rates. All states will come out with notifications on VAT rates by the end of this month,” West Bengal Finance Minister and Chairman of the Empowered Committee of the State Finance Ministers Asim Dasgupta said here today.
Union Finance Minister P. Chidambaram, who attended the meeting, told the empowered committee that the government would come out with a compensation package within a few days for states which have switched over to the VAT regime.
“We discussed the compensation package. The Union Finance Minister said more time was required to work out the package,” Mr Dasgupta said.
Petrol and diesel would remain out of VAT, while LPG would come under the VAT system, he added.
He said a uniform VAT of 4 per cent would be imposed on industrial inputs and capital goods, although there would be an exempted list including products such as building materials
Medicines, medical equipments and other diagnostic devices would attract a VAT rate of 4 per cent.
The committee would decide on the medicines that would be included in the list of life-saving drugs.
The exempted list of VAT will include essential commodities such as salt, jaggery
(gur), and food articles sold through the public distribution system.
