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India Delays Goods And Services Tax

by Lorys Charalambous,, Cyprus

16 January 2017

The Indian Government needs more time to reach a consensus on remaining goods and services tax issues and put in place the necessary frameworks for the regime to succeed, Arun Jaitley, the Finance Minister, has said, pushing forward implementation to July.

India had planned to have GST in place from April 2017 but given delays to the passage of the crucial legislation to amend the constitution late last year, the announcement that India will defer the start date does not come as a surprise. In fact, after more than a decade of failed negotiations towards the introduction of GST, and despite rapid progress made by the Government of late, a July 1, 2017, deadline remains optimistic.

Jaitley said that "there was a broad view [at a GST Council meeting on January 16] that July 1 appears to be a more realistic date for the implementation."

Under the GST proposals, the various elements of the existing indirect tax regime in India 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 centrally levied indirect taxes that would be replaced by the GST include CENVAT, the central excise duty, services tax, customs duties, and any related surcharges. State-levied taxes that would be subsumed by the GST include VAT, sales taxes, entertainment and gambling taxes, the luxury tax, certain entry taxes, and related state surcharges.

TAGS: Finance | tax | value added tax (VAT) | sales tax | India | gambling tax | luxury tax | excise duty | gambling | legislation | services

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