The Prime Minister’s Economic Advisory Council, or PMEAC, has favoured asingle slab each for goods and services or one common rate for both under the proposed goods and services tax (GST), unlike the proposal mooted by the states.“The Centre could follow the pattern in which there is only one rate for goods and one rate for services, or one rate which is common to both goods and services,” PMEAC Chairman C Rangarajan said.

The Thirteenth Finance Commission’s taskforce on the proposed goods and services tax (GST) has recommended a 5 per cent central GST and 7 per cent state GST on all goods and services, except five specific categories. It has proposed a zero rate for exports though it is not in favour of any special dispensation for the special economic zones (SEZs).

In spite of the optimism shown by Asim Dasgupta, chairman of the empowered committee of state finance ministers, the much-anticipated goods and services tax (GST) is unlikely to be introduced on April 1, 2010. The process of Constitutional amendment to bring the new indirect tax legislation may take another five months. “It will take 5-6 months for the amendment and everything else to fall in place. Besides, wecannot start work on things like IT infrastructure as long as a final GST structure is not there,” a highly-placed government official said.

The Centre has turned down the proposal of the empowered group of state finance ministers to keep alcohol out of goods and services tax. The government has in fact suggested that both alcohol and tobacco, which are demerit goods and considered harmful for health, should be kept under GST, with the states getting the power to levy excise duty over and above GST on alcohol. The Centre would have the same power in case of tobacco.

The Delhi government’s proposal to hike value added tax (VAT) from 4% to 5% is seen running counter to the Centre’s move to introduce the goods and services tax (GST) in a bid to bring about uniformity in the tax structure. The Sheila Dixit-led government’s announcement came after tax collection for last fiscal came in at Rs 11,175 crore, down from Rs 13,000 crore the previous fiscal.

Businesses with more than Rs 10 lakh turnover may end up paying the central goods and services tax, with the Centre not agreeing to states’ suggestion of keeping the threshold at Rs 1.5 crore. The empowered committee of state finance ministers had suggested separate thresholds for central GST and state GST, wherein businesses below a [...]

Himachal Pradesh and Uttarakhand, the two Himalayan states which have drawn thousands of crores of investments due to the tax benefits they offer, stare at the possibility of losing the status as Finance Minister Pranab Mukherjee looks to plug loopholes and boost revenues for a government that’s on a spending spree.

The FTP is primarily focused around export-import guidelines and various incentives available for export of goods and services outside India. In addition, it is also an important source of information for companies effecting deemed exports, i.e., supplies for specified projects / purposes in India (such as power projects, refineries, etc.) that are also eligible for various incentives available for physical exports.

The model legislation for the introduction of goods and services tax (GST) will have a provision for registration of individuals and companies which pay the tax.The registration will be done through a uniform PAN-linked business identification number. The Department of Revenue in the Ministry of Finance had recently sent a proposal to state governments for making the 10-digit permanent account number (PAN) the starting point for registering GST payees.

The Constitutional amendment will be the basis for the new tax regime and will be followed by adoption of separate state and Central GST laws. The last amendment to the Constitution dealing with a financial matter was in 2000, when the Centre was given the power to tax services. The Ministry of Finance was in consultation with the law ministry on drafting of the amendment Bill.