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Goods and Services Tax will be advantageous for trade,
says Cyriac
The Goods and Services Tax (GST)
regime, which is expected to come into force on April 1, 2010, will be
“trade-friendly,” said Mr Jose Cyriac, Additional Secretary (Revenue), Ministry
of Finance. |
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Speaking
at a seminar organised by the Bangalore Chamber of
Industry and Commerce in the city, Mr Cyriac assured the
industry: “GST, which is essentially a unified system of
taxes, will have tremendous advantages for trade – those
handling goods, services, businesses and individuals, as
it will bring about uniformity of rates between States,
ensure a seamless movement of transactions, and remove
cascading of taxes.”
Tax e-filing
He also
hinted at the possibility of e-filing of taxes.
In the long run, GST will benefit not just the trade but
the entire economy too, he added.
GST is expected to subsume Central excise, service tax,
CVD, cess, State VAT, Central sales tax, and other
surcharge and taxes levied by the State. It will not
include levies by local self-government bodies, like the
Panchayat, and items such as petroleum.
Liquor and tobacco could be included in GST, said Mr
Cyriac, adding that States could impose an additional
tax on these products. “But a final view is yet to be
taken on this.”
The GST regime will be dual in nature – at the Central
and State levels. The tax rates have not yet been
finalised, said Mr Cyriac.
Challenges
However,
Mr Cyriac warned that GST does have its share of
challenges. Issues include consensus over rates,
differential rates on certain items, compensation
mechanism for States losing out on revenue, tangles
concerning inter-State transactions, deviations and
dispute resolution.
A constitutional mechanism will be put in place to
prevent deviations, he said. To ease the pressure on
States, an assistance of Rs 1,000 crore will be given to
them for GST implementation.
While the nuances and technicalities are being worked
out for rolling out GST, a constitutional amendment is
also required for its implementation, said Mr Cyriac. An
IT infrastructure also has to be put in place, he added.
Source
: The Hindu BusinessLine, India, dated 09/10/2009
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