GST to sail through in 4 yrs: Revenue secy

The transition to goods and services tax (GST) by 2010 will not be a problem since the effective excise duty rate is already 10.5 per cent, the government has said.

"The combined incidence of central excise and service tax at present is around 22 per cent and to bring it down to 20 per cent will not be a problem," Revenue Secretary KM Chandrasekhar was quoted in a PHD Chamber of Commerce and Industry release as saying.

Chandrasekhar said the finance ministry, in consultation with state governments, would draw a road map to implement the unified tax.

"After the success of the value-added tax system, states will be keen to implement the GST. The finance ministry has asked the empowered committee of state finance ministers to design and implement the GST," he said.

On the levy of service tax on commercial rental income, he said the right to use a commercial property was considered a service. He said the dividend distribution tax (DDT) should be viewed not as a corporation tax rate but as a surrogate tax.

Chandrasekhar denied that imposition of fringe benefit tax on employee stock options (ESOPs) would lead to double taxation saying the portion of ESOPs within the fringe benefit tax bracket would be excluded from capital gains tax calculations.