Indian States towards GST Implementation
The Empowered Committee of State Finance Ministers made significant progress towards the implementation of a Goods and Services Tax (GST).
While a number of hurdles remain, the Government was said to have reassured states about the payment of compensation to offset the revenue impact of the introduction of a value-added tax in India in 2005, which was coupled with a reduction in the Central Sales Tax (CST) rate from four percent to two percent.
It was agreed the next step forward should be to agree the degree of decentralization that should be adopted for the administration and enforcement of GST, which will operate in two parts, with a central GST and a state GST.
Implementation of a nationwide GST would introduce a simple, internationally accepted tax regime to broaden the tax base and enable the country to lower trade tariffs. GST would replace the central sales tax, the state sales tax, entertainment tax, lottery tax, electricity duty, and value-added tax.
Source: tax-news
