Proposed goods and services tax and its implications

Abstract

The Finance Ministry of India placed the One Hundred and Fifteenth Constitutional Amendment Bill in the Lok Sabhaon 22nd March, 2011. This Amendment Bill, aimed towards the introduction of the much awaited Goods and Services Tax also known as GST. This step marks one of the most pertinent reforms in the Indian Indirect Taxation system, from both an economic as well as a political standpoint.Formulation of such a bill is not an easy tax,especiallysince multiple stakeholders are involved at both the center and state;however the introduction of such a bill is significant given the challenges faced in doing the same.The Finance Minister in the FY 2011-12 Union Budget has proposed to introduce GST by April 1, 2012. Such a deadline having been extended twice already, critics would be closely watching if this one would be upheldby the government.