CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. Indian GST Faces Further Delay

Indian GST Faces Further Delay

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

04 July 2011


The Indian authorities could miss the April 2012 deadline for the implementation of the long-awaited national goods and services tax (GST), which could now be delayed until June 2012 as the central and state governments continue trying to resolve their differences, according to Sumit D Majumdar, chairman of the Central Board of Excise and Customs.

The GST will be an indirect tax, imposed by all states and the federal government, that would replace existing levies such as central sales tax, state sales tax, entertainment tax, lottery tax, electricity duty, stamp duty and value-added tax (VAT). Exports and direct taxes such as income tax, corporate tax and capital gains tax will not be affected. 



The tax will be collected on goods and services at each stage of sale or purchase in the supply chain, and there will be a tax credit mechanism set in place. The end consumer, as the last person in the supply chain, will bear the final tax.

The government hopes that introducing GST will lead to a corruption-free tax administration, and an increase in tax income because of more efficient collection and increased compliance. It has been estimated that India could gain USD15bn a year as a result of increased exports and employment.

Sumit D Majumdar, chairman of the Central Board of Excise and Customs (CBEC), told reporters this week that because GST is a transaction-based tax as opposed to a direct tax, it was not necessary to introduce it at the start of the financial year. He said that software is currently in the development stage for the implementation of the tax.

When asked about the proposed rate Majumdar said: “World over GST rates are typically between 16% and 20%. In India, it is likely to be the same.”

Finance Minister Pranab Mukherjee has been persevering for a considerable length of time with his plans to roll out the GST. He has, however, faced obstacles in the shape of the main opposition Bharatiya Janata Party and the states, which have been concerned about a loss in their revenue and worries that the tax reform will give too much power to the federal government. This has been despite the Finance Minister agreeing to fully compensate states' losses.

Majumdar said that a taskforce has been set up to put together the GST legislation, and that a dispute settlement authority will be up and running when the tax is introduced, to resolve any conflicts.

TAGS: tax | sales tax | India | goods and services tax (GST) | legislation | tax rates | tax reform | services

To see today's news, click here.

 















Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »



Stay Updated

Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.


To manage your mailing list preferences, please click here »