Goods and services tax once introduced will be the biggest fiscal reform since independence, said Ved Jain, president, ICAI. Conceptualised by finance minister P Chidamabram in 2005, when he announced introducing the value added tax. GST is a multi-stage consumption tax imposed on a broad range of goods and services. It is a tax on transactions and end-customers who consume the goods or services and bear the final cost of the tax.
The way ICAI has supported the government in its idea of implementation of VAT, we believe that ICAI will play an effective as well as constructive role in creating awareness about the benefits that the common goods and services tax will have in terms of the fiscal discipline. The approaches that would be taken up by ICAI would bring uniformity in the goods and services tax, said Ved Jain.
The goods and services tax will be quite helpful in evolving an efficient and harmonized consumption tax system in the country. The GST would be introduced on April 1, 2010. Chidambaram had earlier said, It is my sense that there is a large consensus that the country should move towards a national-level GST that should be shared between the Centre and states. However, the state and central level tax rates would differ and there may be four or more tax rates.
The Centre would have a separate tax or goods, which could be levied at two or more rates.