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2010] GST - THE SCENARIO IN SOME OTHER COUNTRIES 113
GOODS AND SERVICES TAX - THE
SCENARIO IN SOME OTHER COUNTRIES
The author, in this article, has given a bird’s
eye view of GST legislation in six countries
mentioning about the salient aspects of
such tax in these countries giving various details
about law and procedures. He feels that before
taking up the work relating to legislation concerning
GST, the Government should get a study of the
legislation and implementational aspects concerning
such a tax in these countries studied.
T.N. PANDEY
EX-CHAIRMAN,
CBDT
Introduction
1. The country is agog with discussion concerning the futuristic indirect
taxes regime for the country - The Goods and Services Tax (GST). Already
two reports on GST have been published - one of the Empowered Group
of the States Finance Ministers headed by Shri Asim Dass Gupta, Finance
Minister of West Bengal and the other by a Task Force of the 13th Finance
Commission headed by Shri Arbind Modi, Joint Secretary in the Ministry
of Finance. Shri Vijay Kelkar, Chairman, Finance Commission had earlier
given a roadmap concerning this tax for India.
Briefly, GST is a common tax for both goods and services which is leviable
at each time of sales and provision of services and for which the seller or
service provider can claim the input credit of tax which he has paid while
purchasing the goods or procuring the services. This is very similar to VAT
which is applicable in most States and could be, broadly, described as
National level VAT on both goods and services. In South Africa GST is also
called VAT - Value Added Tax. In September 1999, South Africa replaced,
its General Sales Tax (GST) with a comprehensive type value added tax
(VAT) which is akin to GST.
The GST is conceived of as a single rate tax system (though a practice of
having two/three level taxes is also found in some jurisdictions). Its basic
advantages are :—
� Elimination of cascading effect of taxes;
� Tax is to be borne by consumers instead of by businesses;
� Removal of dual taxation in certain situations;
� Avoidance of multiplicity of taxes;
� Reduction in cost of production consequent to elimination of cascading
effect.
GOODS & SERVICES TAX CASES ❑ JANUARY 20 - FEBRUARY 4, 2010 ◆ 23