States seek bigger service tax share
The states now want a bigger pie in services of inter-state nature. They have made a pitch for levying and collecting tax on such services.
By Deepshikha Sikarwar, TNN |
NEW DELHI: The Centre may have to be content with select services of inter-state nature like financial services and telecom. The states now want a bigger pie in services of inter-state nature. They have made a pitch for levying and collecting tax on such services.
The joint working group met on Friday to deliberate on the issue. Consensus also seems to be building in favour of a single rate for service tax both at the central and state levels.
The joint working group will now work out a revenue-neutral rate after which the report would be submitted to the empowered group of state finance ministers, sources told ET. The empowered committee will submit its recommendations to the finance minister for implementation.
The GST report had suggested the states should tax intra-state services while inter-state services should remain with the Centre. Representatives of some states, especially large ones, felt the services that are clearly inter-state in nature like financial services and telecom can be passed on to the Centre, but the ones without a clear identity should remain with the states.
The panel comprises state finance secretaries, commissioners of commercial taxes and concerned joint secretaries in the Union finance ministry and empowered committee member secretary Satish Chandra.
After the finalisation of the model, the empowered committee would call a meeting of chambers of commerce & industry and trade associations, and work out a draft white paper on GST that would be put on the Website for public comments.
GST is proposed to be introduced from April 1, 2010, to integrate all indirect taxes on goods and services at the central and state levels. In November, the empowered committee had accepted the recommendations of a working group on GST for dual GST structure, one at the state level and the other at the central level.
The joint working group met on Friday to deliberate on the issue. Consensus also seems to be building in favour of a single rate for service tax both at the central and state levels.
The joint working group will now work out a revenue-neutral rate after which the report would be submitted to the empowered group of state finance ministers, sources told ET. The empowered committee will submit its recommendations to the finance minister for implementation.
The GST report had suggested the states should tax intra-state services while inter-state services should remain with the Centre. Representatives of some states, especially large ones, felt the services that are clearly inter-state in nature like financial services and telecom can be passed on to the Centre, but the ones without a clear identity should remain with the states.
The panel comprises state finance secretaries, commissioners of commercial taxes and concerned joint secretaries in the Union finance ministry and empowered committee member secretary Satish Chandra.
After the finalisation of the model, the empowered committee would call a meeting of chambers of commerce & industry and trade associations, and work out a draft white paper on GST that would be put on the Website for public comments.
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GST is proposed to be introduced from April 1, 2010, to integrate all indirect taxes on goods and services at the central and state levels. In November, the empowered committee had accepted the recommendations of a working group on GST for dual GST structure, one at the state level and the other at the central level.
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