India gst: Indian Goods and Services Tax (GST)

An Empowered Committee of the government of India on 10 November 2009 issued a first draft discussion paper stating the key features for an Indian Goods and Services Tax (GST). The proposed GST would have both a central government (CGST) and a state (SGST) component with uniform provisions to the extent practicable. Some of the existing taxes would be subsumed into either the CGST or SGST, including the excise duty, service tax, luxury tax, VAT / sales tax and state cesses and surcharges. (Some existing taxes on specified products would continue to be levied even after the introduction of GST.) Exports would be zero-rated and the import of goods and services would be subject to both GST components based on the destination principle, with the GST on imported goods and services available as a credit in specified situations and based on the fulfillment of certain procedures. Imposition of the GST would be subject to threshold requirements, exemptions and incentives (e.g. goods supplied to special economic zones). Intra-state transactions would be subject to a new tax labeled as
IGST.