With the second draft of the proposed Goods and Services
Tax regime framework expected to be released by the
month end, India will take the second major step towards
the eventual introduction of the omnibus indirect tax.
Senior government officials have told CNBC TV18 that the
second draft would incorporate several suggestions and
changes sought by stakeholders.
A crucial meeting of the empowered committee is
scheduled to meet here on December 16. This meeting
will, among other things, discuss feedback from
stakeholders and also evolve a further consensus on the
rate structure and associated details. Separately, the
13th Finance Commission, which is assessing the impact
of the proposed tax including its impact on foreign
trade, is expected to release a study that it has
commissioned on December 24. The study has been
conducted by the National Council of Applied Economic
Research.
Meanwhile, experts continue to examine the draft
Amendment to the Indian Constitution that will pave the
way for the implementation of the tax.
The delay in the draft is because of the view that
a dual-structure may change the basic structure of the
constitution that puts in place a federal system of
government in the country.
One month after the first draft GST paper was
unveiled there is still no final decision on the rate
and the date. In fact, the rate can only be decided once
the tax base is defined, something that the government
is working on now. The Centre was keen to introduce the
constitutional amendment in the winter session, but this
is now most likely in the Budget session. So, it is now
October 2010 that looks like the most realistic date for
GST implementation.
