‘Goods, services tax has to cross many hurdles'

The proposed Goods and services tax (GST) will remove many of the anomalies in the indirect tax structure of the country, but it has still a long way to go, as the consent of the states is required and a constitutional amendment should also be effected for the purpose, according to Mr Shailendra Kumar, Managing Editor of >taxindiaonline.com .

He was delivering a lecture here recently at a seminar on tax matters organsied by the Tax Law Research Group. He said the Union Government was in no position to set a deadline for the introduction and implementation of GST, as many complex issues would have to be addressed first. Many states were not taking it favourably, as it would mean substantial loss of revenue for them, even though the Union Government had agreed in principle to compensate them, he said. For instance, Punjab and Haryana would lose revenue on a large scale, as purchase tax being levied by them on foodgrains would be subsumed in GST. Similarly, octroi in Mumbai would be subsumed.

He said thee main issues would have to be tackled before the introduction of GST — threshold limit, size of the tax-payer base and revenue-neutral rate. Mr G. Prabhakara Sastry, convener of the Tax Law Research Group, welcomed the gathering and later spoke on tax issues.

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