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States to look into deviation from agreed tax rates New Delhi
With various states deviating from agreed tax rates on goods, particularly fuel, the VAT panel on Monday decided to bring them on a common ground. Sources said four committees for northern, eastern, western and southern states were constituted today to study deviations and report to the VAT panel in a month's time. The decision was taken at a meeting of the committee of secretaries/principal secretaries and commissioners of trade taxes here. The four committees would study as to what kinds of deviations have taken place and would hold a couple of meetings before submitting reports to the VAT panel, the sources said. However, some members pointed towards difficulties in strictly adhering to the agreed tax rates as VAT panel does not have legal powers to force states in this regard. While there are two main VAT rates of four per cent and 12.5 per cent, there are also certain minimum tax rates for some non-VAT commodities, below which states are not supposed to lower their rates. These rates, called Uniform Floor Rates, are fixed at 20 per cent for diesel and petrol. However, many states are deviating from these rates. All the three neighbouring states of Delhi, Haryana and Punjab have reduced their sales tax on diesel to less than 20 per cent. [Source: The Hindu]
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