India’s GST – A Great Step
June 30, 2010
Recent media reports suggest that the Centre and states have agreed over some of the critical issues involved in the goods and service tax (GST). The governments are believed to have concurred on following issues:
Tobacco will be kept within the ambit of GST. However, the Centre will levy excise duty over and above GST. Alcohol, petroleum, and electricity will be kept outside the ambit of GST, and will attract taxes as per the current regime. States have agreed to subsume purchase tax with GST. Earlier, states like Haryana and Punjab were against it. The above are in line with recommendations of the Empowered Committee of State Finance Ministers.
The development will fuel the pace of GST roll out (April 1, 2011) and we expect the draft paper on GST to be released soon.