New Delhi: The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday gave its approval for designation of Daman as headquarters of Union Territory of Dadra & Nagar Haveli and Daman & Diu, making it the capital of the two merged UTs.

The Parliament on December 3 passed Dadra and Nagar Haveli and Daman and Diu (Merger of Union Territories) Bill, 2019 to merge the two Union Territories of Dadra and Nagar Haveli and Daman and Diu.

As per the Cabinet decision, the Central Goods and Service Tax Act, 2017 will be amended by the Central Goods and Service Tax (Amendments) Regulation, 2020, the Union Territory Goods and Service Tax Act, 2017 will be amended by the Union Territory Goods and Service Tax (Amendments) Regulation, 2020, and the Dadra and Nagar Haveli Value Added Tax Regulation, 2005 will be amended by the Dadra and Nagar Haveli and Daman and Diu Value Added Tax (Amendments) Regulation, 2020.

The Cabinet also decided that the Daman and Diu Value Added Tax Regulation, 2005 will be removed by the Daman and Diu Value Added Tax (Repeal) Regulation, 2020, the Goa, Daman and Diu Excise Duty Act, 1964 amended by the Dadra and Nagar Haveli and Daman and Diu Excise Duty (Amendment) Regulation, 2020, and the Dadra and Nagar Haveli Excise Duty Regulation, 2012 will be axed by the Dadra and Nagar Haveli Excise Duty (Repeal) Regulation, 2020.

The Cabinet decisions will lead to common taxation authorities, better delivery of services to citizens by reducing duplication of work and improving administrative efficiency, help in bringing uniformity in laws relating to GST, VAT and state excise and also avoid any legal complications in the levy and collection of GST Tax, VAT, and state excise, including recovery of arrears, a Cabinet statement said.

"The UT administration of Dadra and Nagar Haveli, and Daman and Diu have taken a big step to realize vision of 'minimum government, maximum governance' for the people of the two UTs, besides savings to government exchequer and ensuring uniformity, stability and consistency in day to day functioning of taxation authorities.

"This is achieved by making amendments, extension, repeal in acts dealing with GST, VAT and Excise, and by designation of Daman as headquarters of Union Territory of Dadra and Nagar Haveli and Daman and Diu in view of merger of Dadra and Nagar Haveli and Daman and Diu on appointed date of January 26, 2020," it said.