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Stiff-lip Jaswant faces fire on VAT

New Delhi, March 28: Finance minister Jaswant Singh’s stinginess with words has some BJP leaders fuming because, sources said, it has landed the party in a spot over value-added tax (VAT).

With the BJP’s traditional base of traders and shopkeepers up in arms against the introduction of the new VAT regime from April 1 and polls in Delhi, Madhya Pradesh, Rajasthan and Chhattisgarh due by November, the party is in a fix on how to placate its votebank and keep Congress predators away.

Singh had given a categorical assurance in the budget that VAT, a multi-point sales tax, would be implemented by the April 1 deadline.

Though all the states, except Delhi, Himachal Pradesh and Arunachal Pradesh, had given their consent to get the draft VAT Bills passed in their Assemblies before the deadline, most are backtracking now because of political pressure and trade agitations.

BJP sources said Singh should have highlighted the support of all states, barring the three, for the VAT draft and put the onus of implementation on the states. But Singh, being a “man of few words”, did not elaborate on this point.

Traders across the country are now blaming the Centre for the new tax regime that is not in their interests.

Worried that the Congress may exploit the issue in the Assembly polls due later this year, the BJP leadership has told the party’s trader cell to submit a report by March 30 on the changes it is seeking in the tax system. The issue may also be discussed at the party’s national executive in Indore on April 4 and 5.

The Centre is now taking pains to explain that small traders do not come under the ambit of VAT as there is a threshold ranging from Rs 3 lakh to Rs 5 lakh of turnover. But they are not convinced because VAT will bring evaders into the tax net, thus increasing the incidence of tax liability.

Traders’ associations have threatened a two-day nationwide strike from March 31 against the proposed VAT regime.

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