Indirect tax reform in India, spanning two decades, is a spectacular achievement of Indian fiscal policy. In terms of its sweep, it is a testimony to the political will of the government, the tax bureaucracy, and the intellectual and legal skills of professionals who have conceptualized and drafted the legislative framework.
The introduction of lower rates of duties; the transition to the central value-added tax credit scheme to counter cascading; the expansion of service tax to cover major services; the integration of the excise duty and services tax in the credit scheme; and the introduction of the state value-added tax across states, is noteworthy.
The proposal to introduce goods and services tax (GST) at both the national and state levels in a vast country like India with different parties running state administrations, is a daunting challenge. However, the series of reform steps taken earlier has enabled the government to move encouragingly to the next level of reform.
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Ravi Singhania is the managing partner at Singhania & Partners. The firm is headquartered in Noida and has offices in New Delhi, Mumbai, Bangalore and Hyderabad.
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