Posts Tagged ‘Indirect Taxation’

Roadmap for GST

Saturday, June 26th, 2010

Roadmap for GST:Not a super highway, but a typical Indian road V S Datey, B. Tech (Hons), FCS, FICWAAuthor of books on Corporate Laws & Indirect Taxes - Published by Taxmann, India This article by Mr. Datey can also be read on his website :

1. Introduction

In view of federal structure of governance in India, there is multiplicity of taxes on goods and services. Excise duty on manufacture, customs duty on imports/exports and service tax on services are levied by Central Government, while sales tax (State Vat), Entry tax/octroi and duty on liquor are levied by State Government.

Besides these, there are plethora of taxes like cesses, surcharge, stamp duty, entertainment tax, road tax and what not.

Such multiplicity of taxes distort the tax structure and brings in complexities. Reforms in taxes is of course a continuous process. Cenvat (that time it was termed as ‘Modvat’) was introduced in 1986 in Central Excise to avoid cascading effect of excise duties. Introduction of State Vat started in 2005 and now most of the States have implemented State Vat.

GST is a logical consequence of State Vat.

Idea of national GST was first mooted by Kelkar Task Force in 2004.

A task force was formed under Chairmanship of Shri Vijay Kelkar on Implementation of Fiscal Responsibility and Budget Management Act. The Kelkar Committee submitted its report in July 2004. The Committee strongly recommended fully integrated ‘Goods and Service Tax’ (GST) on national basis.