States to meet FM on GST base next month

NEW DELHI: States will meet Finance Minister Pranab Mukherjee next month to finalise the list of items to be included in the proposed Goods and Services Tax, which will become the basis for rates in new indirect tax regime and decide the fate of the Centre's fiscal stimulus.

"We will meet the Finance Minister on October 8 and then finalise the list," Chairman of Empowered group of State Finance Minsters Asim Dasgupta said.

The states have decided that there will be two basic rates in their GST structure--one standard rate and the other lower rate for essential items. Besides, there will be a special rate for a small list of precious items in the new tax system that is scheduled to be introduced from April 1, 2010.

However, the list of goods and services to be included in the list has not been finalised yet.

There would be a dual structure of GST, one at the centre and the other at the states level. While there will be two basic rates in the states, the centre is yet to take a call on the number of rates.

Since fiscal stimulus is mainly given by cutting excise duty by six per cent and service tax by two per cent, the rate would also decide whether stimulus would continue or rolled back or diluted.