Delhi: The empowered committee of state finance ministers
on value-added tax (VAT) has decided to allow states that
had adopted the sales tax exemption scheme to continue
with the scheme even after the implementation of a VAT
move, which is a bonanza for large sections of industry,
comes on the back of the recent efforts of the industrially-rich
western states of Maharashtra and Gujarat, which were
making a case, under industry pressure, for the retention
of the exemption scheme.
empowered committee had earlier taken a decision that
all states that had adopted the exemption scheme, prior
to the implementation of VAT, would have to move to a
deferral scheme after the implementation of VAT.
incentives in the pre-VAT regime will continue in the
post-VAT regime. The commitments made by the states to
the industrial units will be honoured, but without disturbing
the VAT chain. The earlier decision
of converting exemption schemes to deferral schemes will
not be applicable as states have now decided to retain
exemption schemes," says Ashim Dasgupta, the chairman
of the empowered committee.