GST will replace VAT in 2010: Punjab Finance minister

Chandigarh, Aug 1 (UNI) With a view to plugging loopholes in the existing VAT structure, the Central Government will be replacing it with Goods Service Tax (GST), which would be beneficoal for the states as well as for the Centre, Punjab Finance Minister Manpreet Singh Badal here today said.

In an informal chat with mediapersons here, he said an empowered committee consisting of Finance Ministers of different states and representatives of the Union Government had been formed for this purpose. This Committee has proposed four GST models and it would be visiting Brazil in the next few days to study the tax structure in that country, he said.

The Central Government proposes to introduce GST by 2010, he added.

Turning to revenue collections in the state, the Finance Minister expressed dissatisfaction with the VAT collected in the first quarter of the current fiscal year. The states VAT collection is around Rs 5,200 crore per annum which was just a meagre five per cent increase yearly, he added.

Turning to Haryana, he said the state was collecting almost double of Punjab through VAT every year. ''The consumer pattern in Punjab is different from Haryana and we should be collecting not less than Rs 10,000 crore annually,'' he added while pointing out that the consumer was spending more in the border state.

However, in the first quarter tax collections are not at the expected level, but ''We are hopeful of meeting our target of 35 per cent increase over the previous year,'' he said. The Finance Minister has sent out strict instructions to the tax collecting authorities to pull up their socks.

On the issue of 'Arhtias' (commission agents) making payments through cheques to farmers for their produce, Mr Badal said he would be calling a meeting of the 'arhtias' on this issue. The interest rates being charged by 'arhtias' on loans to farmers would also be discussed so as to streamline the entire process, he added.

UNI