The empowered committee of state finance ministers met here to fine-tune the draft and finalise the 'white paper' that would contain the structure of VAT apart from other procedural details.

"I am very happy to announce the 'white paper' has been finalised and the empowered committee has endorsed it. The white paper will be issued on January 17," VAT panel chairman Asim Dasgupta said after the meeting.

The 'white paper' would be published in English, Hindi and all the major regional languages and made public so as to create awareness and clear traders' doubts.

The finalisation of the white paper assumes importance in the wake of stiff opposition from traders and apprehension of some states like Uttar Pradesh on VAT.

Dasgupta said the committee had an interaction with national level trade and industry bodies, which have pointed out ground level difficulties in implementing VAT and demanded a more liberal penal cause for non-compliance.

"We will try to accommodate the views of traders on ground-level difficulties. It is our collective effort to reduce the difficulties," he said, assuring traders that there would be a system of self-assessment instead of an 'inspector raj' regime.

On Uttar Pradesh, Dasgupta said Chief Minister Mulayam Singh Yadav had assured the panel that in-principle the state favoured VAT but wanted to ensure that it was congenial for traders.

"Discussions have started with the UP government officials. Certain issues have been pointed out to the empowered committee, but a final decision will be taken by the chief minister," Dasgupta said.

UP Agriculture Minister Ashok Bajpai said the state wanted certain modifications like raising the threshhold limit for traders to come under VAT net from Rs 5 to Rs 10 lakh.

The compounding limit for traders also needed to be raised from Rs 40 to 50 lakh, he said. Moreover, UP wanted that more than 10 items be allowed to be treated as "local importance goods" considering the diverse manufacturing activities like that for biscuits to bricks, handicrafts and glass making.

On the demand of traders, Dasgupta said "basically, traders wanted penal provisions should not be stringent and harassment should not increase."

He ruled out changes in the VAT rates as demanded by the trade bodies saying "it is part of VAT bills, which is the prerogative of states."

The VAT panel would also look into the cut-off points that would determine whether a trader comes under the VAT net or not.

The panel would clarify the doubts in white paper and VAT bills, he added. The VAT panel would again meet on January 17 and formally issue the 'white paper'.