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Centre to amend Sales Tax Act

Our Bureau

NEW DELHI, July 5

THE Government is set to amend the Central Sales Tax Act, 1956 (CST) and the Indian Stamp Act, 1899 as part of the efforts to speed up reforms in the domestic trade tax structure, the Finance Minister, Mr Yashwant Sinha, said on Thursday.

The Empowered Committee of State finance ministers had earlier recommended that the Centre carry out certain amendments to the CST to make it simpler and easier to operate. Mr Sinha told the conference of chief ministers that necessary steps had been tak en to amend the CST accordingly.

The Government had also drafted a new Indian Stamp Act which lays emphasis on adequately defining the scope of papers and instruments, simplifying the procedures, putting in place a proper and responsive machinery and on rationalising the structure of st amp duty rates.

Mr Sinha said that to enable a switchover to a comprehensive VAT system, it was imperative that all States and Union Territories, without exception, comply with the unanimous decision to have uniform floor rates of sales tax and to do away with sales tax -based industrial incentives.

Referring to the suggestion that in a VAT scenario it would be desirable for different States to adopt a common identification number for the purpose of VAT, he said that adoption of the permanent account number with suitable modifications by all States could be a practical solution.

Mr Sinha sought to allay apprehensions expressed by some States that the introduction of VAT could lead to a revenue loss, by citing the international experience. None of the countries which had introduced VAT, had lost revenue. Rather, States would be a ble to enlarge the tax base through adoption of VAT and consequently, they were bound to grow fiscally stronger, he said.

Growth and equity could be achieved by effecting economic restructuring through VAT in States, he added.