Panel to submit report on GST roadmap in Oct

A commitee of central and state officials is expected to submit by October-end its report on the roadmap for implementing the proposed goods and service tax (GST).

The committee was to submit its report in September but was granted a month-long extension.

The Union government proposes to implement GST in the country from April 1, 2010. However, the exact nature of the tax and the modalities of implementing it are being discussed at various levels in the government.

The working group has been asked to study various models of GST across the globe. Delegations of central and state officials have already visited Brazil, United Kingdom, Australia and Singapore for this.

"The joint working group has formed four sub-groups to give suggestions regarding the tax structure, credit mechanism, computerisation and procedural matters," the source said.

Meanwhile, Parthasarthi Shome, adviser to Finance Minister P Chidambaram and the convenor of the group, held consultations with eastern industry chambers in Kolkata on September 22.

After the roadmap is submitted, the empowered committee of state finance ministers will hold consultations with the central government to finalise the model most appropriate to India.

The working group would identify the central and state taxes which could be subsumed in GST. While suggesting a model for the tax base and rate structure, the panel would have to ensure that there was no adverse impact on central and states revenues.

It would also have to suggest how exempted goods and services and non-value added tax items like petroleum goods and alcohol might be treated under the new regime.

However, being a federal country in which states and the Centre share taxation powers, it is unlikely that India will have a unified GST.

"There could be one structure with collection powers vesting with both central and state governments," said a tax consultant.

Industry body Ficci has also suggested a two-tier model with a central GST and a state GST. The GST rate might be around 20 per cent initially, which would be brought down depending on the experience, he added.

GST is expected to reduce tax load on goods and services. At the moment, there are parallel systems of indirect taxation at the central and state levels.