The empowered committee of state finance ministers on value-added tax will meet on April 23 to resolve all pending issues to ensure smooth introduction of the new tax regime from June this year.

In its last meeting on April 8, the panel had finalised the deadline for VAT implementation in at least 16 states, accounting for over 75 per cent of trade and industry, from June 1. 

However, the committee, headed by West Bengal Finance Minister Asim Dasgupta, failed to arrive at a consensus on a large number of issues pertaining to taxation of certain local items at differential rates, official sources said.

Some of the items that would figure prominently in the VAT meeting are the tax rate for life-saving drugs, naphtha and treatment of maximum retail prices, they said.

Other nitty-gritties on administration of VAT and the stringent provisions which were not acceptable by traders may also be taken up.

Traders and truckers had protested against the introduction of VAT and sought Prime Minister Atal Bihari Vajpayee's intervention to block it.

VAT, which was deferred due to lack of preparedness, political pressure and protest from traders, has also prompted ruling BJP to constitute a 5-member committee to represent its views to Finance Minister Jaswant Singh.

With VAT introduction missing the April 1 deadline, the empowered committee is now under pressure to implement it on the new deadline of June 1, 2003.

Following assurance from Centre about 100 per cent compensation in the first year for loss in revenue, states broadly agreed to implement VAT and phase out Central Sales Tax.

States which agreed to implement VAT from June are Maharashtra, Gujarat, West Bengal, Madhya Pradesh, Karnataka, Andhra Pradesh, Tamil Nadu, Kerala, Haryana, Assam, Orissa, Bihar, Jharkhand, Tripura, Goa and Meghalaya.

Union territories Pondicherry and Daman & Diu also decided to go ahead with the new tax regime from June.

States which did not agree to introduce VAT include  Delhi, Uttar Pradesh, Rajasthan, Punjab and Himachal Pradesh.

Sources said many more states would join the list before June deadline.

VAT would result in an overall fall in price level as it would negate the cascading effect of local taxes.

Of the 425 items that would come under VAT, sources said tax rates would come down for at least 78 per cent items resulting in reduction in price level in the country.