The
government took another step towards implementing one of
the biggest tax reforms ever, the uniform goods and
services tax (GST).
Finance Minister Pranab Mukherjee met chief ministers of various states to finalise the GST regime but the meeting remained inconclusive as some state governments want higher compensation for phasing out existing taxes and the subsequent loss of revenue.
The government has not finalised the rate at which the GST will be levied but analysts say a 14% rate will appropriate for a country like India. The introduction of GST will make taxes uniform for goods and services and will also cut down on the role of bureaucracy enabling easier movement of goods and services across state borders.
The new tax to be imposed from April 1, 2010 will substitute a maze of current taxes like the
octroi, sales tax and value added tax (VAT).
Currently, Cenvat rate is 8%, service tax 10% and value added tax 12.5%...
