States to consider 3-tier GST structure: Dasgupta

Confident of rolling out Goods and Services Tax (GST) from April 1 next year, GST panel Chief Asim Dasgupta today said the states will take a view on Finance Minister Pranab Mukherjee's proposal for a three-tier tax structure soon.

"We are trying hard... Rates are determined almost at the end. Certain rates were proposed by the Centre. We are discussing among ourselves. We can't go public unless we form the final view," he told reporters after a meeting of state finance ministers with Mukherjee.

Mukherjee has proposed a three-rate structure under GST -- which will simplify the indirect tax regime -- under which goods will attract a 20 per cent levy, services 16 per cent and essential items a concessional 12 per cent.

Revenue from GST will be shared equally between the Centre and states, implying that out of the 20 per cent tax proposed for goods, 10 per cent each would go to the Centre and the state concerned.

Dasgupta, who is chairman of the Empowered Committee of State Finance Ministers, said the states have also got the Centre's draft proposal on the Constitutional Amendment Bill required to roll out GST.

"We will discuss the proposals and will meet again on August 4," he said, adding that there is consensus between the Centre and states on keeping petrol, diesel, alcohol and electricity out of the ambit of GST.

He further said the Finance Minister has assured the states about the Centre's willingness to go beyond the recommendations of the 13th Finance Commission on compensating states for any revenue loss due to GST implementation.

The 13th Finance Commission has proposed a Rs 50,000 crore compensation package for the states for possible loss of revenue after putting in place the GST regime.

However, some of the BJP-ruled states have expressed apprehensions about the introduction of GST from next fiscal.

Earlier, the Centre planned to implement the GST from April 1, 2010, but it extended the deadline by a year to April 1, 2011, due to differences with the states on various aspects, including the tax structure.