New Delhi : 21 May 2015

A meeting of finance/taxation ministers of North Indian states took place at the Delhi Secretariat on Thursday.

The meeting held at the initiative of Delhi finance minister Mr Manish Sisodia was aimed at bringing uniformity in tax rates.

It has been felt that due to huge variance in tax rates, Delhi and its neighbouring states are witnessing a loss of revenue.

Since VAT is a major source of revenue of these states, uniformity of taxes is essential to safeguard revenue.

Following Ministers along with their Finance Secretaries and Commissioners of taxation participated in the meeting:

Mr Sukhbir Singh Badal, Deputy Chief Minister, Punjab

Mr Parminder Singh Dhindsa, Finance Minister, Punjab

Captain Abhimanyu, Finance Minister, Haryana

Shri Parkash Chaudhary, Finance Minister, Himachal Pradesh

Shri Manish Sisodia, Deputy Chief Minister and finance minister, Delhi

Chief Minister of Delhi, Mr Arvind Kejriwal welcomed the Ministers and Officers of these States at the Secretariat, which was followed by deliberations on maintaining uniformity in tax rates.

Many states have increased the tax rates above the floor rates recommended by Empowered Committee of State Finance Ministers.  After discussing the issue at length, following decisions were taken: –

There should be uniformity in tax rates of VAT on all goods, especially the goods in which trade diversion takes place with minimum difference in the sale price.

A Zonal Economic Intelligence Unit should be established to avoid cross border smuggling of goods.

The modalities to achieve the aforesaid objectives, a committee of Secretaries / Commissioners of Finance / Taxation Departments of the northern states shall be formed.  The committee shall meet within a week’s time or so to finalize the matter.  The decisions of the committee should be implemented in a time bound manner preferably within a month.  Commissioner Excise and Taxation, Govt. of Punjab will coordinate the meeting.  The committee will co-opt the Finance Secretaries / Commissioners of Taxation of Jammu & Kashmir, Uttrakhand, Uttar Pradesh and Rajasthan.

After achieving the above objectives the committee would deliberate on policy matters also.