: New Delhi, March 23, 2011
Bringing an end to the four year long wait, the Finance minister Pranab Mukherjee introduced a new bill in Lok Sabha on 22nd March to make amendments in the Constitution of India, so that the age old Indian Service Tax, Excise and Sales Tax are replaced by a single tax entity. The aim of this bill is facilitating the introduction of the Goods and Service Tax (GST) that would replace all indirect levies such as excise, service tax and sales tax. The implementation of GST would be from the next fiscal year, the Finance Minister confirmed. The GST had been under discussion for the last four years but kept on hold due to differences between the center and some state governments over the structure of the new tax regime.
The bill aims to provide simultaneous powers on the center and state governments to levy taxes on goods and services. It would also lead to the creation of a GST Council which will have powers to recommend tax rates and exemption and also set threshold limit for goods and services. This council would be headed by the union finance minister. Besides, the bill also suggests to create a Dispute Settlement Authority to deal with the grievances of the center and the states regarding GST.
It is being expected that the new GST would provide a common national market for goods and services. However only the degree of concessions and exemptions in this new tax system would define who successful this turns out to be or how much it contribute to the convenience or inconvenience of the common man.