Congress to stick to GST deadline    

The reiteration in the Congress manifesto of the commitment to introduce the GST (goods and services tax) regime that is to replace multiple Central and state levies with a single-rate omnibus tax throughout the country will come as a relief to industry and consumers alike.

The idea was expounded first in the 2006 Budget by then finance minister P Chidambaram who had set a target of 2010. The GST will be shared by the Centre and the states and the regime will allow manufacturers and service providers to claim drawback on taxes paid for services consumed by them through the production or delivery stages. The trickledown will help bring down the ultimate price paid by consumers.

At a macro level, GST will help corporate India achieve economies of scale by becoming a common market and help the country score globally in labour-intensive manufacturing.

"Once GST is implemented, all other Central and state-level indirect taxes such as VAT, excise duty, service tax, entertainment tax, luxury tax, etc. will stand abolished and bring substantial relief to the aam admi. GST will create a seamless national common market for our farmers, artisans and entrepreneurs and will boost employment. State finances, and more importantly, the finances of panchayats and nagarpalikas, will be put on a sound foundation,'' the manifesto said.

Already, much work has been done on the idea. The finance ministers of states recently disussed the issues. Save for opposition from a few states, the road is nearly clear for the single-tax regime. The main issue is how the tax kitty is to be shared. There is plenty of similarity in the discussions for GST and the talks in the run-up to VAT.