The states could soon be levying a 5-8 per cent tax on imports. The Centre has asked the empowered committee of state finance ministers to draw up a draft law to amend the Constitution to allow the impost.

According to government officials involved in the exercise, the committee is expected to prepare the draft Bill by April.

The Centre is, however, wants the state that consumes the imported product to realise the tax and not the state where the consignment lands.

The states have said any levy by them on imports is compatible with World Trade Organisation regulations. They have pointed out the tax is modeled on a similar levy within the European Union.

The states' demand to tax imports seeks to ensure an "equitable tax regime" after the nationwide imposition of the value-added tax.

Besides the issue of parity, the states are seeking powers to control imports of certain products. The main reason for the demand, however, is to bolster the state exchequers.

As per the revised estimates for 2002-03, basic Customs duty on imports fetches over Rs 25,000 crore (Rs 250 billion).

Even if the duty on oil, which accounts for 70 per cent of the revenue, is excluded, the states stand to gain an additional Rs 8,000 crore (Rs 80 billion) by imposing an equivalent tax on imports.

For taxing imports, however, a constitutional amendment will be needed because Customs duty is in the Union list.