(a) whether the empowered committee of State Finance Ministers on VAT met on 9 July, 2005 to look into the VAT related issues and problems faced by States in implementing the VAT;
(b) if so, the details of the issues discussed and decision taken thereon;
(c) whether the committee has also taken any decision in the wake of Maharashtra and Andhra Pradesh projecting losses under the new regime;
(d) if so, the details in this regard; and
(e) the final decision thereon?
MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI S.S. PALANIMANICKAM)
(a) & (b): A meeting of the Empowered Committee of State Finance Ministers was held on 9th July, 2005, to discuss various VAT related issues. Gist of the decisions taken in the said meeting is as below:
(i) The Empowered Committee endorsed the revised instructions of the Government of India on compensation and advised the States to start filing their compensation claims accordingly.
(ii) States may give exemption to sales from CSD canteens and claim compensation from Government of India depending on the clarification/ confirmation from Department of Revenue.
(iii) It was decided that there is a need to launch a publicity campaign to motivate consumers and traders to take and issue cash memo after every transaction. There is also need for a continuing campaign in non-VAT States.
(iv) The impact of VAT on prices needs to be studied carefully and in detail.
(v) The States may initiate selective and responsible enforcement. The punitive action need not be harsher than the earlier ones.
(vi) Henceforth, the States should not deviate from approved rate of VAT or from uniform floor rates of sales tax.
(c), (d) & (e): No specific decision was taken by the Empowered Committee in the wake of Maharashtra and Andhra Pradesh projecting losses under the new regime.