States' Finance Ministers assent to idea of ‘negative list of services’

The Empowered Committee of States' Finance Ministers has in-principle given its assent to the idea of a negative list of services mooted by the Centre.

The negative list of services includes those services which will not come in the ambit of taxation. AIR correspondent reports that the committee has also favoured the abolition of upper limit of 2,500 rupees for professional tax.

Talking to the media in Bhopal after the first day meeting of the empowered committee yesterday, the Chairman of the committee and Deputy Chief Minister of Bihar Sushil Kumar Modi said that the committee is in favour of negative list of services but it feels definition of services should include the term an economic activity and not each activity.

He said that committee suggested that the negative list of services could include those areas in which states have taxation rights. This list could be implemented from 1st April this year.

The committee has recommended one time constitutional amendment for doing away the upper limit of professional tax. Mr. Modi said that there should be freedom to states to decide on upper limit. The committee has also suggested reduction in the number of centre-sponsored schemes. It is of the view that money should be provided to the states directly so they could start schemes as per their requirements.

The empowered committee will meet again today in Bhopal to discuss other issues.