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India Will Fail To Introduce GST On Schedule

by Mary Swire, Tax-News.com, Hong Kong

28 December 2015

India will miss the April 2016 deadline for the introduction of goods and services tax, after lawmakers failed to adopt crucial legislation during the winter session of Parliament, which ended on December 23.

There were already doubts as to whether India would achieve the deadline earlier this year, with the opposition Congress Party said to be blocking the Government's efforts to finalize plans for the regime.

While India has made substantial progress towards an agreement on the scope and structure of the new regime, lawmakers have yet to agree on a revenue-neutral rate, among other things.

Under the GST proposals, the various elements of the existing indirect tax regime will be replaced by a comprehensive dual-GST system, with Central GST and State GST to be levied concurrently by the center (federal Government) and the states, respectively. The GST is the most significant economic reform before Parliament but it remains bogged down in the upper house, the Rajya Sabha, with the Congress Party standing in the way of the passage of the Constitutional Amendment Bill required to allow states to levy GST on services.

Ahead of the start of the winter session, Finance Minister Arun Jaitley told various media outlets during a trip to Dubai that the Government planned to reopen talks with opposition parties on the key Constitutional Amendment Bill. Now those talks have failed, even the introduction of GST during 2016 appears optimistic.

TAGS: Finance | tax | value added tax (VAT) | India | law | goods and services tax (GST) | legislation | Dubai | services

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