Goods and Services Tax
Now-a-days our country is following the unitary system for collection of Indirect Taxes levied on manufacture, sale and consumption of goods as well as services in order to create a suitable reform in Indirect tax from both domestic and foreign investment perspective thereby reducing burdensome compliance, high cost of transaction and nagging uncertainty in tax liability for a business.
The budget speech of 2006-2007 included a proposal for commencement of Goods and Services Tax (GST) and in the budget speech of 2009-10 it has been said again that the introduction of GST would be accelerated with effect from April 01, 2010.
GST model is outlined with a dual GST consisting of a Central and a State GST. To relieve the pressure on States, an assistance of Rs 1,000 crore will be provided to them for GST implementation
The Indian government is studying tax reforms that include many other Central and State level direct and indirect taxes, excise duties, service tax and luxury tax, and replace them with a single Goods and Service Tax (GST). Customs duty will be levied out of GST and is likely to be replaced by VAT on imports.
The introduction of goods and services tax will create an effect for abolition of taxes such as octroi, Central sales tax, State level sales tax, entry tax, stamp duty, telecom licence fees, turnover tax, tax on consumption or sale of electricity, taxes on transportation of goods and services, and get rid of the cascading effects of multiple layers of taxation. |
