The empowered committee of state finance ministers is set to meet in New Delhi on Friday to discuss the procedure for registration and filing of returns under the proposed goods and services tax (GST) regime.
Union finance ministry and state finance ministers are keen to give a final shape to the legislative framework for the new indirect tax regime, even though the Constitution Amendment Bill redefining the taxation powers of the Centre and the states are pending in the Rajya Sabha.
In this regard, a panel led by chief economic adviser Arvind Subramanian is expected to submit its report on the possible revenue neutral GST rate soon. The proposed GST council, which will have Union and state finance ministers as members, will take a final call on the GST rate keeping in mind the various recommendations.
Sources said that since petroleum, real estate and liquor would be kept out of GST in the initial years, the available tax base would shrink and hence, the combined Centre-state GST rate could be more than 20%, which could eventually be brought down as the tax base is expanded.
A select panel of the Rajya Sabha, which reviewed the Bill recently, suggested that the rate should not exceed 20%.