VAT panel favours dual structure for GST

The official committee on Value-Added Tax favours having a dual structure for Goods and Service Tax (GST) when it is introduced on April 1, 2010.

The committee comprising state finance ministers is agreeable to the idea of a dual structure - a central GST and a state GST, its Chairman Asim Dasgupta told reporters here on Wednesday.

The Empowered Group of State Finance Ministers on VAT would send its recommendations to the Centre next month after the state finance ministers give their views in writing, he said after the panel's meeting here.

"After getting the written viewpoints, we will finalise the report. But we hope to send the report to the Government of India by the month of December," he said.

In a nutshell, within the framework of GST, there would be more than one slab of tax for goods, but a single rate for services at the state level. At the central level, the rates will be decided by the union government, Dasgupta said, adding that they are likely to be on a similar pattern.

Like VAT, there would be set off - that is amount of tax paid on inputs would be reimbursed - at both the Central and state levels.

GST at the state level will subsume as many taxes on goods and services as possible and feasible, he said.

Source : Economic Times - Gurgaon, Haryana, India, dated 28/11/2007