India has pressed the pedal on the administrative groundwork needed for the goods and services tax (GST) — even after the opposition blocked crucial legislation in this regard — signalling that it is confident of rolling out the ambitious indirect tax reform on time.
The Central Board of Excise & Customs is creating two dedicated verticals that will deal with the policy and implementation of the new tax. “Work is going on full steam…Sub-groups under our officials and that from states are working on the law and procedures… directorate for service tax will make way for a directorate for GST with two verticals,” VS Krishnan, member, CBEC, told ET. The GST will incorporate a plethora of state and central taxes with a single levy and is proposed to be introduced on April 1, 2016.
The single-rate GST will replace central excise, service tax, state value-added tax, entertainment tax, octroi, entry tax, luxury tax and purchase tax and is projected to add as much as 2% to the country’s gross domestic product.
The GST Bill, which was passed by the Lok Sabha, could not be taken up in the Rajya Sabha in the just-concluded monsoon session of parliament because the opposition did not allow the house to function. The ruling National Democratic Alliance government is in a minority in the upper house.
The verticals – one for performance management and the other for taxpayer services — are being created to ensure that policy formulation and implementation under the new tax regime respond urgently to GST requirements, in line with the government’s resolve to make it easier for doing business.
The new tax will not only usher in uniformity in taxation but also bring about harmonisation in procedures and rules between the Centre and the states as also among the states themselves. States would adopt a harmonised nomenclature system, while procedures for registration, filing of returns, payment of tax and audits would be seamless across the country.
The new directorate of taxpayer services will have the power to mandate third-party audits and studies to ascertain the satisfaction level of key stakeholders with tax practices so that corrective steps can be taken.
Incidentally, the indirect taxes body has declared 2015 as the year of taxpayer services.