India Goods & Services Tax implementation delays
- 8 August 2012 | Richard Asquith
The India Standing Committee reviewing the implementation Indian goods and services tax (GST) to replace the creaking Indian VAT system looks certain to conclude that the planned introduction date of April 2013 will now be missed. The complexities of reconciling the requirements of the numerous State governments and the administrative mechanism to manage the tax are at the root cause of this latest holdup.
Businesses operating in India suffer one of the most complex and inefficient indirect tax regimes in the world. Many of the problems with the current Indian VAT system stem from numerous and conflicting taxing authorities at the federal and state levels. This can result in cross-state despatches of goods suffering double taxation. In addition there are numerous taxes, including VAT, Business Tax and various duties.
The implementation of Indian GST has been delayed several times in the past three years, and it is not yet clear when the new date will be. It is likely to be sometime in 2014 as a new Bill with fresh recommendations from the Standing Committee cannot be considered anytime soon under the Parliamentary calendar.