The Hindu Business Line : `Industry must debate transition to Goods and Services Tax regime'

Road map
Proposed introduction of GST from April 1, 2010.
General consensus for GST to be around 20%
Central IT integration for taxation nearly complete.

Hyderabad May 26 The industry should take an active role in the debate on the transition to the Goods and Services Tax (GST) regime, according to Mr A.K. Raha, Member, Central Board of Excise and Customs (CBEC).

In his inaugural address at a seminar on central excise, customs and service tax, organised jointly by Tax Law Research Group and Taxindiaonline here on Friday, he said the proposed introduction of GST from April 1, 2010, would bring about a massive change.

"The Finance Minister had said that GST would be a single levy. The vital aspects like its collection and distribution should be widely debated. The industry too should come up with its point of view," he said.

Though an empowered committee consisting of finance ministers from all States headed by Mr Asim Das Gupta, West Bengal Minister for Finance, was seized of the matter, there had been no consensus on the issue of GST collection yet. "The States deem it a loss if the Centre collects it. But for the Centre, budgetary control is also important," he said.

There was a general consensus that the GST should be around 20 per cent but the problem was its distribution between the Centre and States, he observed.

Firming-up IT

Stressing the importance of creating a firm information technology (IT) platform for GST, Mr Raha said that at the Central level, IT integration of all application of central taxation was nearly completed. "We have nearly completed the consolidation of all applications in a single IT platform and are awaiting the financial grant to complete it," he said.

The States, on their part, should work on putting a common IT platform in place for a smooth transition to the GST regime, he advised.

"We suggest that there should be a single challan payment. The IT application can automatically separate the share of a particular State and Centre at the time of payment itself," he said.

Further, as GST would mean shift of taxation from manufacturing to supply, there could be complaints from industrially weaker states, he opined.

Mr Gautam Bhattacharya, Commissioner (Service Tax), CBEC, and others also spoke.