The government is considering to enact Service Tax Act and is likely to allow states to levy the tax on local items after nationwide value-added tax is introduced, a senior official of Central Board of Excise and Customs said on Thursday.

CBEC member Mahendra Prasad told PTI, adding the government was in the process of drawing up a list of items in which states would be empowered to levy taxes.

After the constitutional amendments made in the last session of Parliament, the states have been allowed to apportion and collect service tax.

However, Centre plans to come up with a separate list of services, which are local in nature, and allow states to levy taxes. Other services, which are spread nationwide would come under the ambit of the Centre.