The Hindu Business Line : Joint group working on goods, services tax models

Kolkata, Sept. 13 The Joint Working Group formed by the Government of India, comprising State finance ministers and senior finance ministry officials, to make suitable recommendations to the Department of Finance on a model Goods and Services Tax is now working on three or four GST models, and is expected finalise its report within the next 3-4 months.

Besides procedural changes, full-fledged e-filing of VAT returns and e-payments, subject of course to full computerisation of commercial taxes directorate, are some of the new initiatives under consideration in West Bengal. E-filing of returns for certain classes of dealers in West Bengal is expected to begin by end-2007.

Speaking at an interactive session on “State Taxation” organised by the Bharat Chamber of Commerce here today, Mr H.K.Dwivedi, Commissioner of Commercial Taxes, West Bengal, said the group was now into a serious phase of discussions in the last two months, and working to a timeframe.

He said the discussions centered around the inputs supplied by various government delegations to Australia, Canada, Singapore and Brazil for studying the GST system in practice in these countries under a federal structure.

According to Mr Dwivedi, the basic objective in pursuit of a suitable GST system in a federated structure was elimination of multiplicity of taxes. Computerisation of tax directorates and simplification of procedures, as recommended by the Kelkar Committee on indirect taxes, should first be achieved, he pointed out.

“It is difficult to say at this stage which one will be adopted.” Most importantly, he felt, the States’ constitutional powers to levy and collect taxes should be studied.

Describing the prevailing Indian taxation system as more progressivecompared to those in the countries mentioned, he said certain elements of the GST system in other countries may be adopted.

He said the three-tier tax system in Brazil was most complicated, as it has set off a rate war among the States.

The problem areas, according to him, were harmonisation of rate structure and classification of commodities. He said the VAT return forms were now sufficiently simplified.