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India May Miss April Deadline to Start Goods and Services Tax, Mitra Says
India may miss the April 1 deadline to introduce a goods and services tax as state governments sought more time to study the proposal, a finance ministry official said.
“It is unlikely that the deadline will be met,” Revenue Secretary Sunil Mitra said in an interview in New Delhi today. “We have not been able to reach a consensus with the states on the constitutional amendment bill.”
The goods and services tax, or GST, aims to unify multiple indirect taxes such as excise and sales levies imposed at the federal and state levels. The government says the current tax structure inflates prices, delays movement of goods and encourages evasion.
The government’s plan to move to GST requires amendments to the Indian constitution. State governments have asked for more time to study the bill and therefore it can’t be tabled in the current session of parliament, which ends on Aug. 31, Mitra said.
India fixed the April 1 deadline after missing an earlier plan to roll out GST on April 1, 2010.
According to the proposal, the federal government and states will share the revenue from GST based on tax rates fixed by them.
Finance Minister Pranab Mukherjee has suggested the federal government impose GST at the rate of 6 percent on essential goods such as drugs, 10 percent on the so-called non-essential products such as cars and 8 percent on services. He has asked states to come up with their tax rates.
To contact the reporter on this story: Tushar Dhara in New Delhi at tdhara1@bloomberg.net
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