Bengal finance minister Asim Dasgupta (left) with Planning Commission director . K. Singh in Calcutta on Wednesday. A Telegraph picture

Calcutta, Dec. 17: The empowered committee of state finance ministers for the implementation of value-added tax (VAT) would meet in the first half of January to decide on the implementation of the new tax system.

Bengal finance minister Asim Dasgupta, who chairs the committee, said here today, “Although no date has been finalised regarding the meeting of the committee in New Delhi, we are possibly going to meet in the first half of January.”

Dasgupta was speaking at a seminar on ‘Economic Policy Reform Issues’ jointly organised by the Confederation of Indian Industry and the Stanford Center for International Development (SCID).

When asked if he believed that VAT might be introduced in the country from April 2004, he said he would not comment on possible dates.

He added that 10 states were ready to implement VAT immediately. “These states account for 70 per cent of the country’s total trade and business,” he said.

Dasgupta added that apart from traders, there was also a section of industry that was creating hurdles in the implementation of VAT. “It is sad that a section of industry is also supporting the traders,” he added.

He said the Centre was yet to work out the formula for compensation of loss to the states following their shift to VAT.

Dasgupta added that two years back tax on land was raised. “Following this hike, tax collection increased to Rs 135 crore last fiscal. This year, we expect to garner Rs 400 crore on this account,” he added.

. K. Singh, director of the Planning Commission, expressed confidence that the country would see over 7 per cent growth in gross domestic product (GDP) in 2003-04, but added that maintaining the growth rate would be a difficult task.

Singh, who is looking into the power sector reforms, said, “The Planning Commission’s first report on the power sector on creation of enabling fiscal regime for power and energy sectors would be submitted to the finance ministry on December 24.”

The country needs to change its tax collection methods as also improve healthcare and education in rural areas to derive the benefits of economic reforms, Singh said.