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. It also urged the Centre to amend the definition of services.

The negative list of services includes those services which will not come in the ambit of taxation.

Talking to the media in Bhopal after the first day meeting of the empowered committee in Bhopal, 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 that definition of services should include the term “an economic activity” and not “each activity”.

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

Mr. Modi said that the committee also favoured the abolition of upper limit of 2500 rupees for professional tax. This limit was prescribed in 1988 in the country and increase in the upper limit requires amendment in the Constitution.

He said that the upper limit should be left to the discretion of the concerned states.

The committee has also suggested that the number of Centre sponsored schemes should be decreased and money should be provided to the states directly so that they could start schemes as per their requirements.

Mr. Modi informed that the VAT revenue has been increased in the country by more than 20 per cent this year. He said that the committee also discussed other issues which would be raised in a pre-budget meeting with the Union Finance Minister on ther 18th of this month in New Delhi . The empowered committee will meet again tomorrow in Bhopal to discuss other issues.