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Government to levy cess on goods, services
22 July 2010: The Union Ministry of Finance has proposed a three-rate structure for the Goods and Services Tax -- which will simplify the indirect tax regime -- under which goods will attract 20 per cent levy, services 16 per cent and essential items a concessional 12 per cent.
All central and state taxes like excise, VAT and service tax will be rolled into GST, once the new regime comes into effect. These rates are planned to be implemented from 1 April 2010.
The revenue from GST will be shared equally between the centre and states, implying that out of 20 per cent tax proposed for goods, 10 per cent each would go to the centre and the state concerned.
Similarly, in case of services, the revenues will be equally shared between the centre and the state. Besides the maximum rate of 20 per cent, the ministry has also proposed a lower rate of 12 per cent for essential items. This too will be shared euqally between the centre and states at 6 per cent each.
Source: Times of India