Govt mulls common GST regime

The state governments and central government have agreed to a dual goods and service tax (GST) regime from April 1, 2010, said Asim Dasgupta, Chairman, Empowered Committee of State Finance Ministers here.

The panel is now working with the central government to determine the rate of GST at central level and state level for all goods and services. The states, which had earlier mooted for separate rates of tax on goods as well as services, have agreed for a common rate for both. However, there could be two slabs of rates for GST, Dasgupta said.

Meanwhile, the states have asked the central government to give additional plan assistance of Rs 20,000 crore to make up for the revenue shortfalls due to economic slowdown in the current year. The tax revenue growth of states have come down to 12 per cent in the month of November as compared to 23 per cent growth in the previous month.

During their meeting with prime minister Manmohan Singh, the states will also request the centre to bear half of the additional burden on account of revision of salaries of state government employees after the Sixth Pay Commission report.

With revenues likely to be hit further in coming months, the states have also sought additional market borrowing to keep their plan expenditures for roads, irrigation, housing and other social sectors in tact.

The states have also opposed the move of the central government to give aviation turbine fuel a declared good status. This would result in drastic reduction of state sales tax to 4 per cent from 20 per cent now.