GST regime will lessen tax burden: Modi      

The Bihar government has accepted in principle the Centre's uniform Goods and Services Tax (GST) regime that is most likely to come into force from the next fiscal, and accordingly, has also decided to implement it to escape the time lag.

Deputy CM Sushil Kumar Modi said on Saturday that GST was the "greatest indirect tax reform measure in the post-Independence period", which has been envisaged to harmonize the country's indirect tax regime with GST under implementation in over 150 countries.

The move would end multiplicity of indirect taxes as all the existing indirect taxes would be merged into the single GST. Instead, there would be three separate areas of GST -- Central GST, State GST and inter-state GST, Modi said, adding: "Goods and products purchased would neither be dear, nor cheap. The move, in fact, would lessen the tax burden, and the ultimate beneficiary would be the consumers."

Yet, the three types of tax rates would be so decided that the last revenue earnings of the respective state governments are not affected. "The net effect would be revenue neutral for the respective state governments. The Centre would compensate the losses suffered, if any," Modi said.

According to him, the rates of Central, state and inter-state GSTs had not yet been fixed, and would be done in consultation with the finance ministers of states concerned. The suggestions of both the state and Central trade and industry bodies have been sought. The matters, at present, were under discussion stage, he said, adding that Union finance minister Pranab Mukherjee initiated it in Delhi on November 10.

Modi made these observations at the function held to release the "First Discussion Paper on Goods and Services Tax in India" that had been prepared by government officials for discussion at proper fora. Modi released the 53-page book under the aegis of the Bihar Chamber of Commerce, and called upon the trade and industry circles to go through it, so that the state government could incorporate their suggestions in its report to be presented to the Centre for second discussion.

Earlier, commercial taxes department commissioner S K Majumdar made a powerpoint presentation on various aspects of GST. Those present included BCC president P K Agrawal, vice-president T B S Jain, present and former Bihar Industries Association (BIA) presidents K P Jhunjhunwala and K P S Kesri, respectively. Modi also said that traders and industrialists who would come under GST would have to go for computerization, since it would help in tracking the sale and purchase of goods, and they would have to file tax returns to the Centre and the state government.

Source : Times of India, India, dated 15/11/2009