The Indian Goods & Services Tax (GST) implementation plans took a big step forward last week as a new Bill was published included resolutions to many of the issues that have long-held up the reforms to the existing indirect tax regime.
The new Bill includes a target of 2016 for the role out of Indian GST. It has withdrawn a controversial dispute settlement council. It also includes a graduated tax rate for the key commodity of floor.
Presently, India operates a complex and overlapping VAT, Service Tax, and other taxes system. This can lead to a heavy administrative burden on companies, especially on intra-state trade where there is regular double taxation on the same transactions. Considerations about a refurbishment of the regime, and the starter of GST based on the OECD’s guidelines on global VAT, have long been discussed. It is supposed that it could add 1% to 2% to the GDP of the country be enlightening the economic situation.
