Friday, August 26 2005 16:08 Hrs (IST) - World Time -

New Delhi: Inspired by growing revenue of states that opted for VAT, five BJP-ruled states were likely to fall in line in two months.

Indicating this, Madhya Pradesh Chief Minister Babu Lal Gaur today (August 26, 2005) said "We have resolved about 90 per cent of the issues and if the rest gets sorted out we could have VAT in next two months".

"We have had talks with Finance Minister. We want certain clarifications on the compensation as implementing the VAT in present form would entail a revenue loss of Rs 1400 crore. But we are hopeful of resolving all issues in next two months," Gaur said on the sidelines of a FICCI interactive meet.

Gaur said the issue was what would be the states' share in central goods and service tax and also as to what extent would the Centre compensate for the revenue loss on account of VAT.

He said there was also the issue of phasing out of Central Sales Tax but emphasised that all the BJP ruled states would act in tandem on the issue.

As per the agreed package, centre will compensate states for any revenue loss due to VAT by 100 per cent this fiscal, 75 per cent in next fiscal and 50 per cent in the third year.

Central Sales Tax is planned to be phased out by 2007-8.

Besides the five BJP-ruled state, UP, Uttaranchal and Tamil Nadu have also not implemented the VAT.

Touting MP as an attractive investment destination in his address, Gaur said the State had the advantage of its unique geographic location and was all set to become power surplus by 2007.