VAT:Centre to partly compensate Tamil Nadu for revenue loss

Centre to partly compensate Tamil Nadu for VAT loss

Chennai: The Centre has agreed to partly compensate Tamil Nadu for the loss in revenue owing to implementation of the Value-Added Tax system, Chief Minister M Karunanidhi said here.
"VAT will abolish multiple rates of tax and will bring in only three slabs. It will abolish the Additional Sales Tax and surcharge, which will help the public. We are prepared to incur the losses for the benefit of public," he said, replying to a debate in the Legislative Assembly.

"The Centre had consented to reimburse 75 per cent of this year's loss and the state government would bear the rest of the 25 per cent," Karunanidhi said.
Next year, Rs 2,700 crore loss was predicted due to VAT, of which 50 per cent would be compensated by the Centre. The rest will be borne by the state, he said.
He also said World Bank had approved the state's integrated watershed development scheme at a cost of Rs 2,547 crores, under which tanks, canals and lakes would be modernised. An agreement would be signed with the bank very soon, he said.

To help the unemployed, he announced those who failed to renew their registration in employment exchanges from 2001 to 2003, could renew their registration. They would also be eligible for the unemployment dole given by his government, he said.

Source:The Hindu