Thursday, March 10 2005 21:10 Hrs (IST) - World Time -

New Delhi: As the majority of States prepare themselves to the switch over to Value Added Tax (VAT) regime from next month, Uttar Pradesh, Rajasthan, Madhya Pradesh and Jharkhand are still reluctant to join the league.

While UP Chief Minister Mulayam Singh Yadav made it clear that the State would not switch over to VAT unless traders agree, Rajasthan Chief Minister Vasundhara Raje wanted Central Sales Tax (CST) to be withdrawn before the new tax regime sets in.

"Till traders in the State do not agree, we will not implement it (VAT). We have set up a committee headed by Amar Singh to go into the issue," Yadav said in New Delhi today (March 10, 2005).

Raje, on the other hand, said, "VAT cannot be implemented in the present form unless Centre spell out the roadmap for phasing out CST." Since small traders contribute significantly to the State's economy, they will be affected by the dual presence of CST and VAT.

Another BJP (Bharatiya Janata Party)-ruled State Madhya Pradesh demanded a "clear roadmap" on phasing out of the 4 per cent CST while Jharkhand was not ready due to "political uncertainties".

Trade bodies have also threatened to go on 4-day strike from March 29 if VAT is implemented.

Despite the Opposition, Empowered Committee of State Finance Ministers' chairman Asim Dasgupta and secretary Ramesh Chandra had asserted that most States will stick to the April 1 deadline in introducing VAT.

After missing the deadline for more than four times in last 6 years, VAT panel is determined to opt for tax reform as majority of States see about 20 per cent jump in revenues.

"There is bound to be some friction whenever there is a movement. But we will stick to the April deadline. There will be no deviation this time," Chandra said.