Gst Reforms and Intergovernmental Considerations in India

Working Paper No.1/2009-DEA

GST Reforms and Intergovernmental
Considerations in India

Satya Poddar
Ehtisham Ahmad

March 2009
Department of Economic Affairs
Ministry of Finance
Government of India

GST Reforms and Intergovernmental Considerations in India
Satya Poddar and Ehtisham Ahmad*
Content

1.
2.

Introduction................................................................................................................. 3
The Current Taxes and Their Shortcomings ............................................................... 4
A. Taxation at Manufacturing Level............................................................................ 5
B. Exclusion of Services.............................................................................................. 5
C. Tax Cascading......................................................................................................... 6
D. Complexity.............................................................................................................. 7
3. Objectives of Tax Reform........................................................................................... 9
A. Basic Objectives...................................................................................................... 9
B. Fiscal Autonomy and Harmonization ................................................................... 10
C. Centre and State Taxation Powers ........................................................................ 13
4. Options for the Centre and State GSTs ..................................................................... 14
A. Concurrent Dual GST ........................................................................................... 15
B. National GST ........................................................................................................ 16
C. State GSTs

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