The Indian Government has fixed
April 1, 2010 as the date in which the Government will bring in goods and services tax (GST) in
India. Currently, there are excise and customs duties levied by the Central Government and various other taxes such as sales tax, entry tax, octroi, entertainment tax etc., are levied by the State Government. GST is presumed to subsume all the existing taxes and there will be only one GST paid by the customer. The aim of this levy is to make the Indian market competitive in the world market and to avoid the multiple levies at different stages.
The Empowered Committee comprising of all the State Finance Ministers was entrusted with the task of preparing a model and roadmap of GST. With only 8 months to go to meet the deadline of implementing GST in April 1, 2010, the Government has not come out with any draft legislation or white paper as to how the form and structure of this new levy will be.
The Finance Minister, while presenting the Budget for the year 2009-2010 has observed as under with regard to the implementation of GST:
“I have been informed that the Empowered Committee of State Finance Ministers has made considerable progress in preparing the roadmap and the design of the GST. Officials from the Central Government have also been associated in this exercise. I am glad to inform the House that, through their collaborative efforts, they have reached an agreement on the basic structure in keeping with the principles of fiscal federalism enshrined in the Constitution. I compliment the Empowered Committee of State Finance Ministers for their untiring efforts. The broad contour of the GST Model is that it will be a dual GST comprising of a Central GST and a State GST. The Centre and the States will each legislate, levy and administer the Central GST and State GST, respectively. I will reinforce the Central Government’s catalytic role to facilitate the introduction of GST by 1st April, 2010 after due consultations with all stakeholders.”
The Finance Minister has atleast confirmed that it will be a dual GST comprising of Central GST and State GST and the Centre and the States will each legislate, levy and administer the Central GST and State GST respectively.
Trade and Industry are still in surmise as to how to get themselves equipped when GST is implemented in the country. The bigger question that, however, remains is will GST be implemented on April 1, 2010??
