India to implement GST by April 2010

The Indian central government said it would do its best to implement a proposed Goods and Services Tax (GST) by April 2010. It also promised to simplify the country’s tax administration process for better compliance by citizens. The implementation of GST, which will subsume many indirect taxes such as excise duty and valued-added tax (VAT), will create a unified market for goods and services, the Finance Ministry said. According to Finance Minister Pranab Mukherjee, he met state finance ministers in June to hold pre-budget consultations. However, the government has not decided what the GST rate would be and which agency would collect the tax. It also is not yet clear whether alcohol and other goods would be included. Taxes on petroleum products, which contribute nearly 40% of tax collections, are kept outside the GST regime to protect the revenues of the central government and the country’s states.(June 5, 2009)