States have been asked to send their views on value added tax by December end so that a white paper envisaging the VAT rates for 530 items and exemption limits for traders could be released in the first week of January.The empowered committee of state finance ministers, which held its first joint meeting with industry and trade bodies here on Monday, will also finalise other procedural details for smooth implementation of VAT from April 2005.The draft has already been prepared and the white paper on vat will be ready by December 2004, VAT panel chairman Asim Dasgupta told trade and industry bodies.The draft white paper was circulated to states for their comments and slated to be finalised by December 15. However, sources said, not all the states have sent their views so far. So, the white paper will be ready only by December end.According to sources, there is a broad consensus that VAT rates will remain at 4 per cent on 270 farm and manufacturing inputs and other essential items like drugs and medicines. About 250 final products are slated to attract VAT at 12.5 per cent. ‘Demerit goods’ like alcohol and chemicals are slated to attract a higher rate of 20 per cent while items pertaining to national security and essential items would be exempted from VAT. Precious metals will attract VAT at one per cent.Petroleum products, whose prices are market-determined, along with sugar, textiles and tobacco, which attract special additional duties, will be out of VAT purview.The VAT panel discussed with trade and industry bodies the new tax regime with an open mind and sought to address each and every aspect of VAT.
