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Rajya Sabha
10 States/Uts have not yet implemented VAT. These are Uttar Pradesh, Uttaranchal, Rajasthan, Madhya Pradesh, Chhattisgarh, Jharkhand, Gujarat, Tamil Nadu, Chandigarh and Pondicheery.
The prices of commodities depend on a number of factors and it may not be feasible to segregate the impact of VAT on prices. The overall rate of inflation, reflected through the Point-to-Point Movement in the Wholesale Price Index, itself has declined from 5.70% for the week ending 02 April 2005 to 4.07% for the week ending 23 July 2005. The prices of drugs and medicines have come down in most of the States due to reduction in the tax rate from 8% under Sales Tax regime to 4% under VAT. The States are closely monitoring the price situation, to ensure that the benefits of VAT are passed on to the consumers. The Empowered Committee of State Finance Ministers has advised the States to set up special VAT Cells, inter alia, to monitor this aspect and so far, no such proposal has been received from any State in the context of VAT and the Central Government has no proposal to introduce a Central legislation in this regard.
This information was given by Shri S.S. Palanimanickam, Minister of State for Finance in reply to a question raised by Shri N.K. Premachandran in Rajya Sabha today.
BSC/BY/GN-299/05
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