New Delhi, Nov. 10 In what appears to be a victory for States, alcoholic beverages are to be kept out of the purview of the proposed Goods and Services Tax (GST) system. But sales tax/VAT will continue to be levied on them as is the practice now. This is stated in the first discussion paper on GST released by the Empowered Committee of State Finance Ministers here today. Also, excise duty imposed by various States on alcoholic beverages will stay. Tobacco products are, however, to be subject to GST with input tax credit. The Centre will also be allowed to levy excise duty on tobacco products over and above the GST, but without input tax credit.

On petroleum products, there is consensus that crude, motor spirit (including ATF) and diesel would be kept outside GST. Sales tax could continue to be levied by the States on these products with prevailing floor rate, says the discussion paper. A final view on whether natural gas should be kept outside the GST will be taken after further discussions. Releasing the discussion paper, the Chairman of the Empowered Committee, Dr Asim Dasgupta, said that there was “special concern” for small dealers in terms of reduced threshold and a composition/compounding scheme for them.

Dual structure Broadly, India plans to adopt a dual GST structure where the Centre will levy a central GST (CGST) and States will levy a State GST (SGST). The strength of GST lies in continuous set-off from the producers/service providers to retailers’ point, Dr Dasgupta pointed out, adding that this may reduce the overall tax burden on commodities and services and promote growth and employment.

Two-rate structure For State GST, the Empowered Committee has agreed on a two-rate structure — a lower rate for necessary items and goods of basic importance and a standard rate for goods in general. There will also be a special rate for precious metals and a list of exempted items. States want the Centre to adopt a two-rate structure for goods in respect of CGST, with conformity in the levels of rate under the SGST. For taxation of services, the States are keen that there may be a single rate for both CGST and SGST. Without committing on the possible rates for State GST, Dr Dasgupta said that the rates will be made known duly in the course of appropriate legislative actions. On the issue of threshold for State GST, it has been agreed that a threshold of gross annual turnover of Rs 10 lakh both for goods and services for all the States and Union Territories be adopted. Currently, the threshold prescribed in different State VAT Acts below which VAT is not applicable varies from State to State.

States want the threshold for Central GST in respect of goods be kept at Rs 1.5 crore and that for services be placed “appropriately high”. Currently, there is a separate threshold of services (Rs 10 lakh) and goods (Rs 1.5 crore) in service tax and CENVAT. While exports would be zero-rated, similar benefits may be given to special economic zones (SEZ). Only processing zones in SEZs will be eligible for the benefits. No benefit will be allowed for sales from a SEZ to domestic tariff area, says the discussion paper. GST will be levied on imports with necessary constitutional amendments. Both CGST and SGST will be levied on import of goods and services into the country. While destination principle will prevail in deciding the incidence of tax, the tax revenue in case of SGST will accrue to the State where imported services and goods are consumed. Also, full set-off will be available on the GST paid on import on goods and services.

NEW DELHI: Sachin Tendulkar rates the 2007 World Cup debacle as the worst moment of his professional career and blamed the setback on a batting order blunder. India could not make it to the Super Eight stage of the high-profile tournament in the West Indies and crashed out after defeats against Bangladesh and Sri Lanka.

Tendulkar did not say a word on Greg Chappell, insisting he would not disclose dressing room secrets, but had no doubt that the batting order was far from perfect. "I felt our batting order was not right," said Tendulkar, who batted at number four with Robin Uthappa sent ahead of him. "It was a big tournament and we had a fantastic team. Everything looked well set but I felt our batting order was not right. This was one of the reasons (behind India's early ouster)," the champion batsman told Times Now. Chappell was nearing the end of his tumultuous coaching stint with India, having ticked off senior players, including Tendulkar, with his high-handedness.

The Mumbai player, however, refused to disclose anything. "I would not go into the details, for I believe what happens in the dressing room should stay in the dressing room. But of course, things could have been different," Tendulkar said. Bangladesh thumped India by five wickets in the first Group B match at Port of Spain and Tendulkar said it was a freak match for his teammates. "We did not play the way we were expected to. It's not that the players did not try enough. We tried our best but there are days when things don't go your way and it was one of those days," Tendulkar said. Tendulkar said the early ouster was more painful than his own failure as captain of the team even though he has no regrets for failing to make a mark as the skipper of the side.

"No regrets at all. Captaining is not about an individual but a team," he said. "Of course it was painful whenever team lost but losing the 2007 World Cup was more disappointing," Tendulkar added. Tendulkar, who would be completing his 20 years of international cricket on November 15, said fitness-wise, he was feeling alright and was looking forward to playing in the 2011 World Cup. "Touchwood, my body is holding up nicely. Of course I'm looking forward to the 2011 World Cup and by God's grace, we should be able to achieve what we want to achieve," he said. Asked how he would like to be remembered once he hangs up his boot, Tendulkar said, "As somebody who played for the team and was true, sincere and honest as a member of the side...as somebody who has given it all and wanted to be a good team-man."

MUMBAI: The rupee depreciated by two paise to 46.52 against the US currency in early trade, extending its previous day's losses, on dollar demand from refiners. However, dollar's losses against other major currencies, checked rupee's fall.

At the Interbank Foreign Exchange (Forex) market, the domestic unit traded 2 paise lower at 46.52 a dollar in early trade. Yesterday, the rupee ended five paise lower at 46.50/51 against the US currency after the benchmark Sensex slipped by 58.16 points at 16,440.56.

Dealers said some demand for the US currency from refiners and importers mainly put some pressure on the Indian rupee.

SAN FRANCISCO: European antitrust regulators have formally objected to Sun Microsystems' planned $7.4 billion sale to Oracle, escalating a battle over a deal that has already been cleared in the US.

The so-called ‘‘statement of objections'' that Sun received from the European Commission isn't entirely surprising, since the commission already had expressed concerns about possible harm to the database market from an Oracle-Sun tie-up when it launched a formal antitrust probe of the deal in September.