Centre ready with list of items under 3 GST rate categories

Having proposed a three-tier structure 10 per cent for standard goods,6 per cent for essential items and 8 per cent service tax....

Having proposed a three-tier structure 10 per cent for standard goods,6 per cent for essential items and 8 per cent service tax for the proposed Goods and Services Tax (GST) as desired by the empowered committee of state finance ministers,the Centre plans to make the list of each category as palatable as possible for the states.

The Centre has drafted the list of items that would attract lower and standard rates.

It is proposed that all those items which attract 4 per cent excise duty will attract the lower rate of 6 per cent for Central GST,sources told The Indian Express.

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As of now,there are some 57-odd items attracting 4 per cent levy.

Similarly,of the approximately 357 items,which are exempt from paying excise duty but pay value added tax,around 178 items would attract a levy of 6 per cent for CGST. At present,these items attract a 4 per cent levy.

The rest of the items,which at present attract 12.5 per cent VAT,would be taxed at the standard rate of 10 per cent for the central GST.

However,the 99 items that are exempt by states from the levy of VAT,would be exempt by the Centre also and no GST would be levied on these.

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Currently,the list includes items like maize bran,bran of wheat,bangles of glass and plastic,betel leaves,maps etc.

The centre has urged the states to follow the proposed rate structure and the list as well,the sources added.

Even as the BJP-ruled states show reluctance to accept the Centres proposal on draft constitutional amendments on the proposed Goods and Services Tax (GST),the Centre is moving ahead with great fervour to meet the deadline for implementing the GST next year.

The sources said that the draft of the list has been presented to the EC as well and its comments have been sought. The EC is meeting again on August 4 on the issue of constitutional amendments and rates.

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The Centre wants to firm up a consensus on the GST as soon as possible and for the same,it has already agreed to pay 100 per cent compensation for central sales tax (CST) to the states. Also,the Centre has assured sufficient compensation to states in case of loss arising while implementing the GST.

However,sources said that if the BJP-ruled states did not agree to the draft constitutional amendments,likely to be tabled this monsoon session,it would be highly unlikely that the deadline of April 1,2011 could be met for implementing the new indirect tax regime.