The deviations in value added tax (VAT) have taken centrestage. The maiden meeting of the newly-constituted expert group of commissioners of sales tax from all states, which will be held on Monday (July 14) in New Delhi, will discuss the issue and work out various suggestions to remove the current deviations. Various states, including Maharashtra, Kerala, Punjab and Tamil Nadu, to mention a few, have deviated from VAT rates of 0%, 4% and 12.5% and introduced new rates for consumer goods and other items for their benefit. These deviations have also led to unhealthy competition among states to attract investments. Apart from states, industry and business chambers have made a strong plea for removal of these deviations. The empowered committee has permitted each state to exempt 10 items out of a list of about 50 items of ‘goods of local importance’ to charge an appropriate rate of tax.
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