Union Budget 2015 – Indirect Taxes

The Finance Minister has reiterated during his Budget speech that Goods and Service Tax Act (GST) will be brought into force from April 1, 2016. Though there are couple of constitutional issues such as amendment to the constitution itself since the Centre and State will have to share taxing rights which hitherto fall within the domain of either of them exclusively. A draft GST Bill is yet to be circulated for the industry and experts to understand as Indian GST will be a peculiar one comparing to various other countries and European Union. The central theme of GST is to ensure that any tax paid as far as possible should be available as credit against output tax liability so that cascading effect of taxes can be eliminated/ reduced. Since the Centre will also have rights to collect sales tax which is as of now the exclusive right of the States, the States are wary in giving up this right though to counter balance the States will have right to impose service tax which