VAT at CSD: Decision soon

The chairman of the empowered committee on value added tax Asim Dasgupta will soon meet Defence Minister Pranab Mukherjee to resolve the issue of VAT on items sold to servicemen through army canteens.

"I will meet the Defence Minister soon," Dasgupta said when asked when would the issue of imposing the new tax on items sold through army canteens be resolved.

He declined to comment on whether army canteens will be exempt from VAT. "How can I tell you beforehand what we are going to decide," he said.

More than 1,000 army canteens remained closed for three days soon after VAT was introduced early this month as they were gearing up for a new billing software.

CSD canteens may come under VAT!

Although senior defence personnel flayed the decision to impose VAT on over 2,000 items sold through army canteens, the finance and defence ministries are yet to resolve the issue with the VAT panel.

The army canteens provided sales tax relief on a host of essential items to about 4.5 million serving and retired defence personnel.

Following the implementation of VAT by 21 states from April, the sales tax exemptions were automatically lifted for army canteens.

The centre and state governments, represented by the VAT panel, will have to decide on who will offer the exemption.