State FMs to fix GST rates likely on Jan 7

 
“We are working on the revenue neutral rate and it would be discussed on January 7,” said Rather, who is a member of the Empowered Group of State Finance Ministers on GST.

While the GST committee set up by the 13th Finance Commission has suggested a rate of 12 per cent to be split between the states and Centre at 7 per cent and 5 per cent

respectively, several states want it to be at least 15 per cent. The empowered committee will take a final call on the GST rate, which will subsume various levies like excise, VAT and service tax, at its January meeting. The GST rate, Rather said, needs to be revenue-neutral and should not result in any loss to the states.

GST is aimed at doing away with most of the indirect tax levies by the Centre like excise and service tax and others levied by the states like VAT and octroi. The new tax regime also has a scheduled deadline for implementation by April 1, 2010.