Dual Structure Proposed for Goods and Services Tax
The new GST regime is slated for implement on April 1, 2010 with the goal of streamlining taxation for the manufacturing and services industry. The new GST proposal will be written as a draft of a constitutional amendment. If it is approved, it will allow the Union government to tax beyond the manufacturing stage and allow states to tax services reports The Economic Times.
The government plans to have separate legislation on central GST and model state GST that indicate rates at which the tax would be levied with probable rates at 8 and 10 percent for the lower slab and 16 and 18 percent for the upper slab. States are petitioning compensation for loss within the first five years following introduction of GST.
“It (GST) will re-distribute the burden of taxation equitably between manufacturing and services bringing about a qualitative change in the tax system,” Finance minister Pranab Mukherjee told The Economic Times.
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