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Indian budget likely to signal move to Goods & Services Tax GST

  • VAT
  • 02 July 2014 | Richard Asquith

Indian budget likely to signal move to Goods & Services Tax GST

Following this Spring’s Indian elections, and the victory by the business-friendly Narenda Modi, it is anticipated that the 2014/15 budget will signal fresh plans to implement Indian GST.

The current Indian VAT, Service Tax, CENVAT and other indirect taxes are complex and often overlap, resulting in high tax burden on manufacturing and a deterrent to trade across State lines. GST, based on the OECD Guidelines for VAT/GST, has long been promised, and offers a potential 1%+ boost to India’s flagging GDP.

Breaking the Indian Central and State Deadlock

It is likely that the budget will deal with the knotty issue how to compensate the States for the loss of local revenues from the exciting consumption tax regime. This has held-up the most recent attempts to introduce GST, with arguments on the split of a single, national tax between the Delhi Central Government and the States.

A single taxing authority

A secondary issue with be the creation of a single tax office, potentially merging the two main direct and indirect tax authorities.


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 this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.