JK seeks compensation package for VAT losses

New Delhi, Sep 26 (UNI) Jammu and Kashmir Finance Minister Tariq Hameed Karra has demanded a compensation package, both monetary and non-monetary, to offset monetary losses due to transition from Central Sales Tax (CST) to Value Added Tax (VAT).

''The state is suffering huge losses due to the deviation from approved VAT rates by the neighboring states eating into Jammu and Kashmir's business due to trade diversion,'' Mr Karra said at the meeting of the Empowered Committee of Finance Ministers here yesterday.

He suggested constitution of zonal sub-groups of Finance Ministers form the East, West, North, South and Central Zones to seek convergence on issues and sort out problems of tax evasion and deviation from VAT.

The Minister advocated placement of Walnuts in the zero per cent rate schedule under VAT regime.

''Walnut being a native fruit of Jammu and Kashmir provides livelihood to a large number of people, usually the poor growers,'' he added.

He said placing walnuts in zero per cent rate schedule would provide relief to a large number of growers, who otherwise fall prey to the machinations of intermediaries.

Mr Karra said the empowered Committee has assured to look into the matter and get back with a positive response.

The Finance Minister argued in favour of uniformity in VAT rates on hand-made and machine made washing soaps.

He also called for compensating the loss due to slashing of tax by the Central Government on LPG from 12.5 per to 4 per cent.

UNI NR RA DS1625