news round up - Taxmann

NEWS ROUND UP
BILL FOR GST ROLLOUT UNLIKELY IN BUDGET SESSION
The constitutional amendment Bill to facilitate rollout of Goods and Services Tax
(GST) is unlikely to be introduced in the upcoming Budget Session of Parliament.
“It is most likely that we will take another seven-eight months for building consensus,”
official sources said. This is a clear pointer that a full-fledged GST rollout will not happen
from April 1, which was the target date. India is looking to introduce a dual GST system-
Central and State. A constitutional amendment is required as the Centre wants to levy
Central GST up to the retail stage. Currently, Cenvat duty is levied only at the point of
manufacture for most items - THE HINDU BUSINESS LINE, NEW DELHI, JANUARY 10, 2010.
NEW DATE FOR GST ROLLOUT LIKELY BY MONTH END
The rollout of the proposed Goods and Services Tax (GST) is set to be delayed further
with the Centre and the States still undecided over the tax rates as well as the
compensation for Central Sales Tax (CST). A fresh date for introduction of GST and its
final structure and rates is now expected to be announced later this month when the
Empowered Committee (EC) of State Finance Ministers holds fresh discussions with
Finance Minister, Pranab Mukherjee - THE FINANCIAL EXPRESS, NEW DELHI, JANUARY
9, 2010.
LOWER VAT/GST ON PROCESSED FOOD, SAYS SAHAI
Food Processing Minister, Subodh Kant Sahai on 8-1-2010 said value-added tax rates
or goods and services tax rates (when it will be in place) on processed food should
be between zero and 4%. Speaking at the North-East Summit organized by the Indian
Chamber of Commerce, he said that if processed food were taxed at higher rates, then
the Food Processing Industry would not be viable for investors. Once the production
level of processed food increases to 50% from the present level of 10%, tax rates could
then be increased. Sahai said that the Ministry had set an investment target of Rs. 1 lakh
crore in the food processing sector by 2015 - THE ECONOMIC TIMES, NEW DELHI,
JANUARY 9, 2010.
CENTRAL SALES TAX MAY CONTINUE FOR NON-GST ITEMS
The Central Sales Tax (CST) levy is likely to continue for non-GST items even after
the introduction of the Goods and Services Tax (GST) system in the country. As an
origin-based tax, India Inc is keen that CST be abolished at the earliest, especially when
a destination-based Value Added Tax (VAT) regime is in place. Earlier, the Government
had indicated that CST will be abolished along with the introduction of GST. The CST
rate was last reduced to 2 per cent in June, 2008. It is likely that the CST levy will continue
for non-GST items, official sources said. This implies that CST may go only for those
items that will come under the proposed GST system. The Centre and the States have
agreed that crude, ATF, motor spirit and high speed diesel will continue to be outside
GST net - THE HINDU BUSINESS LINE, NEW DELHI, JANUARY 20, 2010.
GOODS & SERVICES TAX CASES ❑ JANUARY 20 - FEBRUARY 4, 2010 ◆ 1