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Centre to compensate VAT loss to states; no penalty provisions
Mumbai The Centre today said it will compensate revenue losses incurred to states by the implementation of Value Added Tax (VAT), which would be introduced by a majority of the states from April 1, 2005. "Most of states would be implementing VAT by April one. An Empowered Committee on VAT would be continously monitoring revenue generation of state governments and in case of revenue losses, the Centre would adequately compensate them," Union Finance Minister's Advisor Parthasarathi Shome said here. He was speaking with reporters on the sidelines of a conference organised by Bombay Chamber of Commerce and Industry (BCCI) and Indian Merchants' Chamber (IMC). On penalties for states that would not be implementing VAT, Shome said there would be no such case as it (VAT implementation) is a decision to be taken by the states, while the Centre is only a facilitator.
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