The proposed goods and services tax (GST) will help the
industry and the common man besides state governments, said India’s finance
minister Arun Jaitley.
Speaking at a meeting of the Parliamentary
Consultative Committee attached to his ministry, Jaitley said GST will help
reduce tax-on-tax and will be beneficial to consumers. GST like state-level
value added tax (VAT) is imposed on value addition in each stages of production
and, hence, avoid cascading effect, or tax-on-tax.
"GST will benefit most of the states from Day
1, especially consumer states," he said, according to a statement issued
by the finance ministry. GST is a destination-based tax imposed on products and
services in the states where these are consumed.
Jaitley said GST would be beneficial to the Centre,
states, industrialists, manufacturers, the common man and the country at large
since it will bring more transparency, better compliance, increase in gross
domestic product growth and revenue collections.
As the volume of trade expanded and growth momentum picked up, every state would benefit with the rise in their revenue collections, he added.
He said the Centre proposed to levy a non-vatable
additional tax of one per cent on goods involved in inter-state trade which
would be assigned to states. While this tax will be levied for two years, it
could be extended if recommended by the GST council.
A Constitutional Amendment Bill on GST was introduced in the Lok Sabha on December 19. It would be taken up by Parliament in the next session.
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