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Group on roadmap for GST

Special Correspondent

NEW DELHI: The Empowered Committee on VAT on Saturday announced the constitution of a working group to draw the road map for introduction of the Goods and Services Tax (GST), which is expected to harmonise the indirect taxation structure between States and the Centre.

The group will be co-chaired by Advisor to the Union Finance Minister, Parthasarthi Shome, and Satish Chandra, Secretary of the Empowered Committee of State Finance Ministers on VAT. The Joint Working Group (JWG), also comprising other Union Finance Ministry officials and State Chief Secretaries, will submit its report to the panel in four months, the Committee's chairman and West Bengal Finance Minister, Asim Dasgupta, told newsmen here.

The terms of reference for the group would include making the proposed GST a superior and better tax system than the state-level VAT. "The idea is to reduce the tax load on goods and services and at the same time structured it in such a manner that revenues of each State and the Union Government will also increase,'' Mr. Dasgupta said. For this purpose, the JWG members would also study the models of other countries like Brazil that are introducing GST. The Union Finance Ministry has proposed to introduce GST by April 1, 2010.

There are parallel systems of indirect taxation at the central and State levels. Each of the system needs to be reformed to eventually harmonise them. All states, except Uttar Pradesh, have introduced the VAT system and the Central Sales Tax, which comes in the way of GST, is being phased out from this fiscal.

Mr. Dasgupta said he knew of seven existing models on GST and hoped that the JWG would work out an innovative model suited for Indian conditions.

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