In New Delhi: Finance Minister Pranab Mukherjee said he would introduce major reforms for indirect taxes in the form of Goods and Services Tax (GST) from April 1 next year.
The government was earlier scheduled to introduce GST by April 1 this year.
GST is India's most ambitious indirect tax reform, which seeks to bring together a common market and reduce costs to replace the current fragmented tax regime at central and states levels like service tax, excise duty, VAT, cesses, surcharges and local levies.
The announcement has bagged mixed reactions from the IT industry. The delay, for some, is a positive stand and would help enterprises prepare better for the transformation. However, some experts have shown their disappointment as the industry would have to wait for one more year to reap the benefits of unified tax structure.
"We are glad that the Honble Finance Minister has unveiled the roadmap for GST with a definite date for implementation i.e. April, 2011. Unification of the rate on excise duty and the service tax has been a step in the right direction towards implementation of the GST. The rate of service tax as well as that of excise duty will now be 10%. This will also help mitigate the issue of CENVAT overflow for manufacture of IT products in the country", Vinnie Mehta, Executive Director, MAIT, said.
"We are pleased at the earnest effort to introduce GST from April 2011. The continued focus on deployment of Information Technology for mission mode projects like commercial taxes augur well. Increased budget for the UID and the formation of the technical advisory group under the able leadership of Nandan Nilekani is laudable,Manoj Chugh, President, India and SAARC, EMC Corporation said.
"GST has been postponed to 1st April 2011 as anticipated. Industry will have to keep dealing with multiple level taxation structure for one more year",Vikas Khanvelkar, M.D , DesignTech Systems commented.
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