Asian Research Consortium
Asian Journal of Research in Business Economics and Management
Vol. 5, No. 8, August 2015, pp. 58-68.
ISSN 2249-7307
Asian Journal
of Research in
Business Economics
and
Management
www.aijsh.org
Goods and Service Tax (GST):
A Step towards Indirect Tax Reforms in India
Abhimanyu Sahoo*
*Chartered Accountant and Assistant Professor,
Ravenshaw Business School,
Ravenshaw University,
Cuttack, India.
DOI NUMBER-10.5958/2249-7307.2015.00159.0
Abstract
Buoyed by the overall success of the State VAT, the Centre and the States are now embarked on the
design and implementation of the perfect solution alluded to in the Bagchi Report *. As announced
by the Empowered Committee of State Finance Ministers in November 2007, the solution is to take
the form of a ‘Dual’ Goods and Services Tax (GST), to be levied concurrently by both levels of
government which is a destination based consumption tax. While presenting the Union Budget
2007-08, former Finance Minister P Chidambaram had announced that GST would be introduced
from April 1, 2010, in order to supplement the existing VAT system in India with a tax structure
where goods and services tax can be unified in a comprehensive manner. The Empowered
Committee of State Finance Ministers would work with the Central government to prepare a road
map for its roll out. The implementation of GST will, in all likelihood, be delayed, given that there
is lack of consensus among the States and Centre on aspects relating to limiting fiscal autonomy of
the States. But sooner or later it will see the light of the day. This paper discusses about the
mechanism and operating framework of the proposed GST in detail.
Keywords: Indirect Tax, GST, VAT, Cascading Effect, Input Credit.
________________________________________________________________________________
*
See the web resources available at
http://www.nipfp.org.in/media/medialibrary/2013/04/wp_1995_5.pdf
58
Sahoo (2015). Asian Journal of Research in Business Economics and Management,
Vol. 5, No. 8, pp. 58-68.
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