Our Bureau

Mumbai , April 28

THE Maharashtra Government will clarify its position on value-added tax (VAT) for commodities that did not attract sales tax till now.

The Government will publish a notification by weekend to this effect, Mr Jayant Patil, Minster of Finance, said while addressing the media on Wednesday after an interactive session on VAT organised by Confederation of Indian Industry.

Commodities such as jaggery, salt and bread have been traditionally exempted from the sales tax net, and traders have been demanding the same exemption under VAT.

Earlier, while addressing the session, Mr Patil said internal liberalisation in the country could only be achieved by implementation of VAT. For effective functioning of VAT, the Government is holding a dialogue with all sections of the society. VAT will take about eight years to stabilise; we must test the new system for at least two years. Even in developed countries such as Canada, VAT is not uniformly implemented, Mr Patil said.

He expressed hope that eventually all domestic taxes would merge with VAT and the whole country would have a single uniform tax.

Commenting on the prospects of Gujarat joining the VAT regime, the Minster said that there was a tremendous pressure from within Gujarat to accept the new tax structure.

Mr B.C. Khatua, Commissioner of Sales Tax, Maharashtra, said that a list of life-saving drugs was also being formulated that will be VAT-free, so as to give relief to the common man. There were operational problems pertaining to VAT implementation and these were getting resolved by the department, he said.

© Copyright 2000 - 2009 The Hindu Business Line