CA Dr Arpit Haldia
Goods and Services Tax i.e. GST has been in the news for numerous reasons during the last decade be it the game changing concept in the history of Indian Economy or which GST Approach should be preferred i.e. common GST or Dual GST or whether Indian political system has the required will and common approach for implementation of GST and discussion has gone to the extent of deciding that whether it would anytime be implemented in India or not.
What exactly is Goods and Services Tax, popularly known as “GST’. The Report of the Task Force on “Goods and Services Tax Thirteenth Finance Commission” referred to the report of the Task Force on “Implementation of the Fiscal Responsibility and Budget Management Act, 2003” as follows:
“Accordingly, the Task Force recommended that a well designed destination-based value added tax on all goods and services is the most elegant method of eliminating distortions and taxing consumption. Under this structure, all different stages of production and distribution can be interpreted as a mere tax pass-through, and the tax essentially ‘sticks’ on final consumption within the taxing jurisdiction. Therefore, the Task Force recommended the introduction of a destination based VAT type dual Goods and Services Tax (hereafter referred to as ‘GST’).”
Some of the relevant extract of speech of Hon’ble Finance Minister Shri Arun Jaitely while presenting the 122nd Constitutional Amendment Bill in Loksabha highlighting the features of GST is as follows:
“The object behind the GST is to have a seamless transfer of goods and services across the country.
Let there be no tax on tax. On the destination principle, the tax is at the last stage.
Just as in the case of VAT which was the fear of the unknown that will go down, the Centre benefited, the States benefited. We will address the concerns of each State. We will ensure that their rights are preserved. No State is a loser.
It is unquestionably a very important moment because the whole process of indirect taxation in India will change once the GST itself is implemented. There will be uniformity to taxation as far as the whole country is concerned. There will be a seamless transfer of goods and services.
The other important feature of this taxation is that there would be no tax on tax. It may bring inflation slightly down. Economists estimate that it has a potential to give a boost to India’s GDP itself.”
Therefore, GST is a destination based Multipoint Tax system covering in its ambit both Goods and Services. All stages of production and distribution are held as mere pass through wherein tax paid is given as a credit to be adjusted against the liability to be paid at the next stage and tax finally “sticks” or gets added to the cost at the final consumption stage in the taxing jurisdiction. It has been further described as a destination based VAT Type dual Goods and Services Tax.
There are so many questions which arises to a common mind and some of them are
a) What is GST
b) How it is different from present structure of Taxes at Central and State Level
c) Is it really a magic stick which would bring about a boon as soon as it is implemented
d) What is the impact of DUAL GST and is it really the best available option
e) How will it be implemented
f) Last of the many that when it will be implemented.
The current article would be focusing on the Historical Background of Goods and Services Tax. How it has evolved over the period in India and why it was not implemented in first place over VAT. The background of the implementation of any new law provides us with the more comprehensive understanding of the new law.
1. Leading observations about the Tax Structure prior to implementation of VAT in Sales Tax and CENVAT in Excise and Service Tax
a) It would be appropriate here to refer the observation in “Working Paper GST Reforms and Intergovernmental Considerations in India” for the Department of Economic Affairs Ministry of Finance, Government of India released in the month of March 2009 wherein it was stated that
“The state VAT design is based largely on the blueprint recommended in a 1994 report of the National Institute of Public Finance and Policy, prepared by a team led by late Dr. Amaresh Bagchi (hereinafter, the “Bagchi Report”).”
This Report by Dr Amaresh Bagchi commonly referred to Bagchi Report on “Reform of Domestic Trade Taxes in India: Issues and Options”, National Institute of Public Finance and Policy, New Delhi stated the tax Structure as prevalent in India at that time was as follows:
“Archaic, irrational, and complex – according to knowledgeable experts, the most complex in the world”.
b. The Task Force on “Implementation of the Fiscal Responsibility and Budget Management Act, 2003” July 2004 commented upon the Tax Structure prevalent in India at that time as follows:
“high import tariffs, excises and turnover tax on domestic goods and services have enormous cascading effects, leading to a distorted structure of production, consumption and exports. This problem can be effectively addressed by shifting the tax burden from production and trade to final consumption, and from savings to consumption. The existing tax system introduces innumerable distortions resulting in inefficient resource allocation and adversely impacting GDP growth. It also provides an incentive to firms to engage in political lobbying for exemptions and favourable modifications in the tax schedule. The Indian consumer is known to be remarkably sensitive to apparently small changes in relative prices. The goal of a rational tax system is to empower households to engage in undistorted decision making, driven by their own needs and preferences.”
It can be observed from the above two leading observations on the subject matter that the tax structure prevalent prior to implementation of VAT on sale of goods and CENVAT in Excise and Service Tax was irrational and not progressive. It had many defects including cascading effect of multiple taxes and was more prone to tax evasion and avoidance. The Tax Rates were very high as the taxation base was very narrow, therefore there were political lobbying for exemptions and lowering of Tax Rates. The tax system at time was not providing a level playing field to all the market players. The neutrality principle of taxation provides that the taxes should be such that they provide a level playing field to all the market players and tax should not be a factor in the decision making of the consumer. There were classification issues as there were multiple Tax Rates and most surprisingly there were huge conflicts and competition between the States for lowering of Tax Rates going even to the extent as has been narrated in the “Bagchi Report” as follows:
“The States have been trying to ‘export” taxes via the CST and at the same time undercutting each other in sales tax rates to attract trade and Industry. This has created a situation in which all States are finding it difficult to rationalize their tax structures, and in some states, products like automobiles are currently being taxed at the same low rate as cereals.”
Such competition among the States was neither desired not appropriate. The shortcomings and the suggested way out of them in various studies and reports of the leading authors would be discussed in the series of articles later on.
2. Why then GST was not implemented in place of State VAT in the Year 2004-05
This now takes us to the all important issue of that if such was the requirement of a progressive law then why GST was not brought ten years before in place of State VAT on sale of goods and CENVAT in case of Excise and Service Tax. Why in a country wherein it took approximately 60 years from shifting from Single Point Taxation to Multipoint Taxation, it has been felt within few years and more precisely 10 years of implementation of VAT to again shift from VAT to GST as it involved considerable efforts and preparation. If at all there was a requirement of bringing in GST, then why it was not brought in place before VAT rather than first moving to VAT from single point taxation and then moving from VAT to GST.
The answer had been given in “Bagchi Report” as follows:
“Given this background, the only feasible option seems to be a dual system in which the VAT is levied by the two levels of government independently within the existing constitutional framework. This would be possible if the MODVAT now operating through excise tax system is made into a full-fledged manufacturers VAT and the states also adopt a destination based harmonized system of VAT in place of the chaotic sales taxes operating now.”
The most important remark in the “Bagchi report” which also shows the farsightedness of the Study Team and its Team Leader Dr Amaresh Bagchi is as follows:
“ Although it would not be the perfect or first best solution to the problems of the present system, reform on these lines would go a long way to remove many of its ill effects and perhaps lay the foundation for an even more rational regime in the future.”
Thus, first best solution being GST was not adopted but somewhat a stop gap arrangement VAT was adopted in place to lay down the pathway for implementation of GST in future.
It’s hard not to imagine looking to the current stalemate in the country for implementation of GST that what would have been the situation, if the study team on the recommendation of which the current blueprint of VAT has been brought in place in the states, would have suggested for implementation of GST rather than VAT. It would not be out of place to mention that it would have been possible that our country and economy could have still been stucked in single point of taxation and would have been waiting for implementation of GST without VAT being implemented.
Further it would not be out of place to mention that the Concurrent VAT Structure similar to what has been suggested for implementation as Dual GST was also part of “Bagchi Report” and was discussed in detail as a possible option in the report.
It would be appropriate here to refer the observation in Working Paper on “GST Reforms and Intergovernmental Considerations in India” for the Department of Economic Affairs Ministry of Finance, Government of India released in the month of March 2009 wherein it was stated that
“Buoyed by the success of the State VAT, the Centre and the States are now embarked on the design and implementation of the perfect solution alluded to in the Bagchi Report. As announced by the Empowered Committee of State Finance Ministers in November 2007, the solution is to take the form of a ‘Dual’ Goods and Services Tax (GST), to be levied concurrently by both levels of government.
Therefore, preference was given to VAT over GST at that given point of time. The time has moved on and VAT has been successfully implemented now and the benefits of VAT can be seen by everyone. Therefore, country which took about 60 years from completely moving from single point of taxation to multipoint Taxation, is now seeking to move within a period of 10 years from VAT to GST. We need to be patient and need to understand that it’s no small thing and if it would have been then Bagchi Report, itself would have recommended for implementation of GST at that time.
3. Introduction of Concept of VAT in India in the Indirect Taxes at the Central and State Level
The concept of VAT was first introduced in India in Indirect Taxes in the Year 1986. The Journey of VAT in Central and State Taxes can be highlighted as under
a) 1986: Introduction of VAT at the Central level for a selected number of commodities in terms of MODVAT
b) 2002-03: All commodities were included in terms of CENVAT. This entire process which started in select commodities in the Year 1986 completed full circle and journey in terms of goods in the Year 2002-03.
c) 2004-05: Service taxes were also added to CENVAT.
d) 1st April 2005: States started implementation of VAT for sale of goods in the State
However, at present there is no seamless transfer of goods and services in the country and tax is not a mere pass through during production and distribution and is added as cost in many cases during the intermediate stage. However the concept of GST suggests that the tax should stick as a cost only at final consumption stage. Therefore, the concept of VAT in Central and State Taxes prevalent in the present scenario is limited in scope as against the concept of GST.
4. Historical Background for Implementation of GST highlighted in Extract of Union Budget Speech during the last 10 Years
It has been approximately a decade since the announcement was made by the then Finance Minister Shri P Chidambaram in the budget speech for the Year 2006-07 dated 28th February 2006 for implementation of GST as follows:
“155. It is my sense that there is a large consensus that the country should move towards a national level Goods and Services Tax (GST) that should be shared between the Centre and the States. I propose that we set April 1, 2010 as the date for introducing GST. World over, goods and services attract the same rate of tax. That is the foundation of a GST. People must get used to the idea of a GST. Hence, we must progressively converge the service tax rate and the CENVAT rate. I propose to take one step this year and increase the service tax rate from 10 per cent to 12 per cent. Let me hasten to add that since service tax paid can be credited against service tax payable or excise duty payable, the net impact will be very small.”
It has to be borne in mind that in some states like Rajasthan this declaration by the then Hon’ble Finance Minister was even before the date on which VAT was implemented in the State of Rajasthan i.e. 1st April 2006. The declaration was important in view of the fact that even before some of the states had shifted from single point taxation to Multipoint Taxation with regard to the sale of goods, paradigm was sought to be shifted to a much broader based and progressive scheme of Taxation known as GST. This declaration was more than a whisper and laid down the first real intent for the implementation of GST.
In almost all the budget speech since the year 2006-07, there has been a reference to the implementation of GST. The relevant portion of the Speech of Hon’ble Finance Minister in different years is being reproduced herewith to showcase the historical background of the process and preparation for the Implementation of GST. It showcases the fact that various amendments have been incorporated in statutes to bring the present scheme of taxation in line with the principles of Goods and Services Tax. These amendments would be cross referred in subsequent articles to show case that leaving aside the political issues, the necessary changes in the tax structure are being brought in slowly but surely and the present tax structure is being brought in line with the implementation of GST.
a) Observation about GST in the Budget Speech for the Year 2007-08
VAT, CST and a Roadmap towards GST
116. I wish to record my deep appreciation of the spirit of cooperative federalism displayed by State Governments and especially their Finance Ministers. At my request, the Empowered Committee of State Finance Ministers has agreed to work with the Central Government to prepare a roadmap for introducing a national level Goods and Services Tax (GST) with effect from April 1, 2010.
b) Observation about GST in the Budget Speech for the Year 2008-09
CST and a Roadmap towards GST
183. Following an agreement between the Central Government and the State Governments, the rate of Central Sales Tax was reduced from 4 per cent to 3 per cent in this financial year. It is now proposed to reduce the rate to 2 per cent from April 1, 2008. Consultations are underway on the compensation for losses, if any, and once agreement is reached the new rate will be notified. I am also happy to report that there is considerable progress in preparing a roadmap for introducing the Goods and Services Tax with effect from April 1, 2010.
c) Observation about GST in the Budget Speech for the Year 2009-10
84. In the course of preparation of this budget, I have had the opportunity to interact with large number of stakeholders and receive valuable inputs. Most suggestions were for structural changes in the tax system. Tax reform, like all reforms, is a process and not an event. Therefore, I propose to pursue structural changes in direct taxes by releasing the new Direct Taxes Code within the next 45 days and in indirect taxes by accelerating the process for the smooth introduction of the Goods and Services Tax (GST) with effect from 1st April, 2010 .
85. I have been informed that the Empowered Committee of State Finance Ministers has made considerable progress in preparing the roadmap and the design of the GST. Officials from the Central Government have also been associated in this exercise. I am glad to inform the House that, through their collaborative efforts, they have reached an agreement on the basic structure in keeping with the principles of fiscal federalism enshrined in the Constitution. I compliment the Empowered Committee of State Finance Ministers for their untiring efforts. The broad contour of the GST Model is that it will be a dual GST comprising of a Central GST and a State GST. The Centre and the States will each legislate, levy and administer the Central GST and State GST, respectively. I will reinforce the Central Government’s catalytic role to facilitate the introduction of GST by 1st April, 2010 after due consultations with all stakeholders.
120 . With the Government’s proclaimed objective of introducing a Goods and Services Tax (GST) both at the national and State level, some more steps in that direction are necessary. One measure that would facilitate the process is the further convergence of central excise duty rates to a mean rate – currently 8 per cent. I have reviewed the list of items currently attracting the rate of 4 per cent, the only rate below the mean rate. There is a case for enhancing the rate on many items appearing in this list to 8 per cent, which I propose to do, with the following major exceptions:
d) Observation about GST in the Budget Speech for the Year 2010-11
26. On Goods and Services Tax, we have been focusing on generating a wide consensus on its design. In November, 2009 the Empowered Committee of the State Finance Ministers placed the first discussion paper on GST in the public domain. The Thirteenth Finance Commission has also made a number of significant recommendations relating to GST, which will contribute to the ongoing discussions. We are actively engaged with the Empowered Committee to finalise the structure of GST as well as the modalities of its expeditious implementation. It will be my earnest endeavour to introduce GST along with the DTC in April, 2011.
121. To achieve the roll-out of GST by April 2011, the indirect tax administrations at the Centre and the States need to revamp their internal work processes based on the use of Information Technology. I am happy to inform Honorable Members that project ACES – Automation of Central Excise & Service Tax, has already been rolled out throughout the country this year. This will impart greater transparency in tax administration and improve the delivery of taxpayer services. Similarly, a Mission Mode Project for computerisation of Commercial Taxes in States has been approved recently. With an outlay of Rs.1133 crore of which the Centre’s share is Rs.800 crore, the project will lay the foundation for the launch of GST.
141. The major objectives that have guided me in the formulation of my proposals on indirect taxes are the need to achieve some degree of fiscal consolidation without impairing the recovery process and moving forward on the road to GST
179. To bridge this gap, I had the option to raise the rate of service tax to 12 per cent as it was before I introduced the third stimulus package. I am not resorting to this option to maintain the growth momentum and also to bring about a convergence in the rates of tax on goods and services. I, therefore, propose to retain the rate of tax on services at 10 per cent to pave the way forward for GST.
e) Observation about GST in the Budget Speech for the Year 2011-12
21. The introduction of the Direct Taxes Code (DTC) and the proposed Goods and Services Tax (GST) will mark a watershed. These reforms will result in moderation of rates, simplification of laws and better compliance.
23. Unlike DTC, decisions on the GST have to be taken in concert with the States with whom our dialogue has made considerable progress in the last four years. Areas of divergence have been narrowed. As a step towards the roll-out of GST, I propose to introduce the Constitution Amendment Bill in this session of Parliament. Work is also underway on drafting of the model legislation for the Central and State GST.
24. Among the other steps that are being taken for the introduction of GST is the establishment of a strong IT infrastructure. We have made significant progress on the GST Network (GSTN). The key business processes of registration, returns and payments are in advanced stages of finalisation. The National Securities Depository Limited (NSDL) has been selected as technology partner for incubating the National Information Utility that will establish and operate the IT backbone for GST. By June 2011, NSDL will set up a Pilot portal in collaboration with eleven States prior to its roll out across the country.
122. Mission Mode Projects for computerization of Commercial Taxes in States that I announced in my last Budget, will allow States to align with the roll out of GST. Funds have been released for 31 projects received from the States and Union Territories. Most of the States and UTs have already enabled the facility of dealers making electronic payments. A number of States have already started accepting Electronic Tax Returns and issuing forms required for inter-state trade.
152. In view of the healthy growth in indirect taxes in 2010-11, I had the option to roll back the Central excise duty to levels prevailing in November 2008. I have chosen not to do so for two reasons. I would like to see improved business margins translated into higher investment rates. I would also like to stay my course towards GST. I have therefore decided to maintain the standard rate of Central excise duty at 10 per cent.
153. I propose certain changes in the Central Excise rate structure to prepare the ground for the transition to GST, beginning with a reduction in the number of exemptions. At present, there are about 100 items that are exempt from Central Excise as well as State VAT. In addition, there are as many as 370 items that enjoy exemption from Central Excise duty but are chargeable to VAT. I propose to withdraw the exemption on 130 of these items that are mainly in the nature of consumer goods. The remaining 240 items would be brought into the tax net when GST is introduced.
184. The actual collections of Service Tax do not reflect the full potential of this sector. While retaining the standard rate of service tax at 10 per cent, I seek to achieve a closer fit between the present service tax regime and its GST successor by:
194. Many experts have argued that it will be desirable to tax services based on a small negative list, so that many untapped sectors are brought into the tax net. Such an approach will be very conducive for a nationwide GST. I propose to initiate an informed public debate on the subject to help us finalise the approach to GST.
f) Observation about GST in the Budget Speech for the Year 2012-13
27. Similarly, the Constitution Amendment Bill, a preparatory step in the implementation of Goods and Services Tax (GST) was introduced in Parliament in March 2011 and is before the Parliamentary Standing Committee. As we await recommendations of the Committee, drafting of model legislation for Centre and State GST in concert with States is under progress.
28. The structure of GST Network (GSTN) has been approved by the Empowered Committee of State Finance Ministers. GSTN will be set up as a National Information Utility and will become operational by August 2012. The GSTN will implement common PAN-based registration, returns filing and payments processing for all States on a shared platform. The use of PAN as a common identifier in both direct and indirect taxes, will enhance transparency and check tax evasion. I solicit the support of all my colleagues cutting across party lines for an early passage of these landmark legislations.
158. At the end of June this year, this tax will attain adulthood by completing 18 years. It is therefore time to shift gears and accelerate ahead. However, service tax needs to confront two important challenges to sustain the journey.
We need to bring the two as close as possible in the light of our eventual goal of transition to GST. I have attempted to address both these issues this year.
159. Last year, I had initiated a public debate on the desirability of moving towards taxation of services based on a negative list. In the debate that continued for the better part of the year, we received overwhelming support for this new concept. It has been perceived both as sound economics and prudent fiscal management.
160. Thus, I propose to tax all services except those in the negative list. The list comprises 17 heads and has been carefully drawn up, keeping in view the federal nature of our polity, the best international practices and our socio-economic requirements.
171. Place of Supply Rules, that will determine the location where a service shall be deemed to be provided, are being placed in public domain for stakeholders’ comments and shall be notified when the negative list is put into effect. These rules will also provide a possible backdrop to initiate an informed debate to assess all the issues that may arise in the taxation of inter-state services for the eventual launch of GST.
172. I propose to set up a Study Team to examine the possibility of a common tax code for service tax and central excise which could be adopted to harmonise the two legislations as much as possible at the right time.
g) Observation about GST in the Budget Speech for the Year 2013-14
Goods and Services Tax
186. Hon’ble Members will recall that I had first mentioned the Goods and Services Tax (GST) in the Budget speech for 2007-08. At that time, it was thought that GST could be brought into effect from 1.4.2010. Alas, that was not to be, although all States swear by the benefit of GST. However, my recent meetings with the Empowered Committee of State Finance Ministers has led me to believe that the State Governments – or, at least, the overwhelming majority – are agreed that there is need for a Constitutional amendment; there is need for State Governments and the Central Government to pass a GST law that will be drafted by the State Finance Ministers and the GST Council; and there is need for the Centre to compensate the States for loss due to the reduction in the CST rate. I hope we can take this consensus forward in the next few months and bring to this House a draft Bill on the Constitutional amendment and a draft Bill 30 on GST. Hope inspires courage. I propose to take the first decisive step by setting apart, in the Budget, a sum of `9,000 crore towards the first instalment of the balance of CST compensation. I appeal to the State Finance Ministers to realise the serious intent of the Government to introduce GST and come forward to work with the Government and bring about a transformational change in the tax structure of the country.
h) Observation about GST in the Interim Budget Speech for the Year 2014-15
GST and DTC
73. Revenues are of paramount importance. The best source of revenue is taxes and for that we need modern tax laws. I am disappointed that we have not yet been able to introduce GST. I leave it to you to answer the question, who blocked the GST when an agreement on the game-changing tax reform was around the corner? We have also got ready a Direct Taxes Code that will serve us for at least the next twenty years. I intend to place it on the website for a public discussion without partisanship or acrimony. I appeal to all political parties to resolve to pass the GST laws and the DTC in 2014-15.
i) Observation about GST in the Budget Speech for the Year 2014-15
In the Year 2014-15 in the budget presented during the month of July 2014, the budget speech contained reference to the implementation of GST as follows:
9. The debate whether to introduce a Goods and Services Tax (GST) must now come to an end. We have discussed the issue for the past many years. Some 4 States have been apprehensive about surrendering their taxation jurisdiction; others want to be adequately compensated. I have discussed the matter with the States both individually and collectively. I do hope we are able to find a solution in the course of this year and approve the legislative scheme which enables the introduction of GST. This will streamline the tax administration, avoid harassment of the business and result in higher revenue collection both for the Centre and the States. I assure all States that government will be more than fair in dealing with them.
j) Observation about GST in the Budget Speech for the Year 2015-16
11. We are now embarked on two more game changing reforms. GST and what the Economic Survey has called the JAM Trinity – Jan Dhan, Aadhar and Mobile – to implement direct transfer of benefits. GST will put in place a stateof-the-art indirect tax system by 1st April, 2016. The JAM Trinity will allow us to transfer benefits in a leakage-proof, well-targetted and cashless manner.
96. We need to revive growth and investment to ensure that more jobs are created for our youth and benefits of development reach millions of our poor. We need an enabling tax policy for this. I have already introduced the Bill to amend the Constitution of India for Goods and Services Tax (GST) in the last Session of this august House. GST is expected to play a transformative role in the way our economy functions. It will add buoyancy to our economy by developing a common Indian market and reducing the cascading effect on the cost of goods and services. We are moving in various fronts to implement GST from the next year.
118. As part of the movement towards GST, I propose to subsume the Education Cess and the Secondary and Higher Education Cess in Central Excise duty. In effect, the general rate of Central Excise Duty of 12.36% including the cesses is being rounded off to 12.5%.
121. Introduction of GST is eagerly awaited by Trade and Industry. To facilitate a smooth transition to levy of tax on services by both the Centre and the States, it is proposed to increase the present rate of service tax plus education cesses from 12.36% to a consolidated rate of 14%.
Hassle Free Business Environment:
Created a non-adversarial tax regime, ending tax terrorism; Secured the political agreement on the goods and services tax (GST), that will allow legislative passage of the constitutional amendment bill;
Conclusion: From the above relevant extract of budget speech of the past decade, following conclusions can be carved out on a generalized basis:
a) Reforms have taken place in the field of Taxation to adopt the best practices in line with the implementation of GST i.e. adoption of Negative List, Building up of IT Infrastructure, Development of GST Network, Convergence to a Common Rate under Service Tax and Central Excise, Place of Supply Rules under Service Tax etc.
b) There have been commitments to implement GST. The commitments are yet to be fulfilled. However, the magnanimity of task has been discussed above which requires common approach and political will.
c) The General Tax Rate under Central Excise and Service Tax has seen rise over the past years under the garb and reasoning of Goods and Services Tax.
d) 122nd Constitutional Amendment Bill for Goods and Services Tax was tabled in Loksabha on December 19, 2014 and has been passed in Loksabha on May 6th 2015 and is pending before the Rajyasabha. Prior to 122nd Constitutional Amendment Bill, 115th Constitutional Amendment Bill, 2011 relating to GST was tabled in the parliament as has been referred to in budget speech for the Year 2011-12.
e) Leaving aside the political issues, the necessary changes are being brought in slowly but surely in the present tax regime and structure in line with principle of implementation of GST.
f) Automation of the Tax Revenue departments had commenced and is in full swing so as to make them prepared for the change. However, it has to be said that a lot is yet desired on this front.
g) Abolition of CST and revenue compensation to the states for loss of revenue from abolition of CST is still a major bone of contention for implementation of GST in India.
With this I would conclude the present article providing the historical background for implementation of GST and how the concept has evolved in India for the Last 20 odd years. Commitments have been made but commitments on political front are yet to deliver result.
Next Article would be focusing upon the principle of destination based taxation. What the principle provides and how it is different from origin based taxation. The article would further analyse that how principle of destination based taxation has become the foundation on which the Goods and Services Tax is implemented and how our country has slowly over the last thirty years moved from origin based taxation to destination based taxation.
Note from the Author: This series of articles on Goods and Services Tax would be an effort to put forward a detailed view of the subject. The series would make an effort to analyze the intricacies and details about Goods and Services Tax. It would be an effort to narrate the issue to have an understanding on the subject.