GST to Make Goods and Services more Competitive both in Domestic and International Markets: FM.
GST
Dated:- 22-5-2012
Press Information Bureau
Government of India
Ministry of Finance
22-May-2012 15:45 IST
GST to Make Goods and Services more Competitive both in Domestic and International Markets: FM
The Union Finance Minister Shri Pranab Mukherjee said that the primary benefit of the Goods and Services Tax (GST), when introduced, would be the removal of cascading effect of taxes which acts like a hidden cost and makes goods and services uncompetitive both in domestic and international markets. The Finance Minister Shri Mukherjee said that GST would check leakage of revenue and the States should be able to realize tax revenues commensurate to consumption of goods and services within their territory. He said that it would provide a stable source of tax revenue and would play a very vital role in sewing India together into one common market. The Finance Minister said tha
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Shri Rajkumar Dhoot, Shri Sabir Ali and Dr. Ashok Sekhar Ganguly from Rajya Sabha. Among thje officials, Finance Secretary, Shri R.S. Gujral, Secretary, Financial Services, Shri D.K. Mittal, Secretary Disinvestment, Shri Haleem Mohammed Khan, Chief Economic Advisor, Dr. Kaushik Basu and senior officials of the Ministry of Finance also attended the aforesaid meeting.
The Finance Minister Shri Mukherjee said that there are several factors that make the current situation conducive to the introduction of GST in India. He said that studies have shown that the introduction of GST would act like a stimulus and instantly spur the rate of growth of the economy. Shri Mukherjee said that all the States have successfully switched over from the erstwhile Sales Tax system to the State Value Added Tax (VAT). He said that with the implementation of the recommendations of the 13th Finance Commission, the two items in respect of which the States were prevented from levying VAT viz., textiles and sugar
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ister Shri Pranab Mukherjee said based on this conception, the Centre has already introduced a Constitution Amendment Bill in the Lok Sabha in February 2011the first step in the legal process that would culminate into the GST. The Finance Minister Shri Mukherjee said that he is hopeful that the Standing Committee on Finance would soon give its report on the Bill so that the process of legislation in this direction can move forward.
The Union Finance Minister Shri Pranab Mukherjee said that the Empowered Group on IT Infrastructure for GST (EG) headed by Shri Nandan Nilekani had recommended creation of a Special Purpose Vehicle (SPV) which was further endorsed by the Empowered Committee of State Finance Ministers(EC). He said that the SPV would be a non-government, not for profit company with a self sustaining revenue model. He added that it would be governed by the representatives from the Centre, State and other private stakeholders. The government would however retain the strategic c
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ountry. They said that GST is a key reform and be introduced at the earliest. They said that GST will result in higher tax collections both by the States and the Centre. This will also lead to increase in the Tax GDP ratio. They however cautioned that it must be ensured that introduction of GST does not lead to any hike in prices of commodities as inflation is still above comfort level. Some members suggested that there should be single point of taxation as multi point taxation leads to harassment of businessmen and traders. It was also suggested that the threshold limit should be kept little higher so that small traders are outside the purview of GST as it is very difficult for them to maintain books of accounts etc. Many members suggested for the same rate of taxes in all the States so that businessmen and traders donot indulge in any tax evasion activities. Some members suggested that the Constitution Amendment Bill on the subject recently introduced in the Parliament needs some cor
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