LinkedIn
Facebook
Twitter
Whatsapp
Telegram
Copy link

Proposals for the introduction of a goods and services tax lack clarity and are riddled with inconsistencies

Shivam Mehta and Kapil Kumar Sharma explain

India’s broad based tax regime aims to cover as many people and enterprises as possible. As a result the country enjoys reasonable rates of taxes and duties. In fact, when compared with other economies of a similar size, India has one of the lowest rates of income tax in the world.

Offsetting this however, is the complexity of the Indian system, which is dominated by multiple laws and federal and state tax credit chains that are not inter-usable. The multiplicity of laws makes the system opaque and unpredictable, especially for foreign enterprises, many of which are used to having a single tax authority, a unified rate and predictable outcomes.

The move from a federal sales tax to a goods and services tax (GST), which was first proposed in the union budget of 2007-08, is expected to iron out these deficiencies in the country’s tax regime. The GST will replace the multiple indirect taxes that are currently levied – such as manufacturing tax (excise), service tax, federal sales tax, state value added tax, etc. In doing so it is expected to trigger an expansion of the tax base that will result in increased tax revenues. However, uncertainty prevails over many elements of the GST regime, including the exact date of its implementation, which has already been pushed back to 1 April 2012.

You must be a subscribersubscribersubscribersubscriber to read this content, please subscribesubscribesubscribesubscribe today.

For group subscribers, please click here to access.
Interested in group subscription? Please contact us.

你需要登录去解锁本文内容。欢迎注册账号。如果想阅读月刊所有文章,欢迎成为我们的订阅会员成为我们的订阅会员

已有集团订阅,可点击此处继续浏览。
如对集团订阅感兴趣,请联络我们

Shivam Mehta and Kapil Kumar Sharma are senior associates at Lakshmikumaran & Sridharan. The article was written with the assistance of V Lakshmikumaran, the firm’s managing partner.

LinkedIn
Facebook
Twitter
Whatsapp
Telegram
Copy link