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India lower house approves GST reform

  • May 5, 2015 | Richard Asquith

India lower house approves GST reform

The lower house of the Indian Parliament, the Lok Sabha, today approved the Constitutional Amendment Bill to introduce a Goods & Services Tax (GST) Indian regime.

GST will replace a myriad of consumptions taxes, including: VAT; CENVAT; Service Tax; and Professional Tax.  These are highly complex to comply with, and often overlap causing a large degree of double taxation.  This hampers the development of India’s free, internal market that is viewed as a major constraint to growth.  It has been estimated that a fully functioning VAT-like tax in India, based on the OECD recommended model, could boost annual growth in India by up to 2% per annum.  Chinese VAT is undergoing a similar reform to great success.

The Indian Bill will next go to the upper house for approval.  It then must be agreed to by a majority of the Indian States.  It is still hoped that the implementation date will by 1 April 2016.

VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which won International Tax Review's 2020 Tax Technology Firm of the Year. Richard trained as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.