NEW DELHI: India on Tuesday introduced legislation to pave the way for the passage of a far-reaching reform aimed at simplifying tax on goods and services.
The long-delayed Goods and Services Tax, or GST, seeks to create a uniform levy system in Asia's third-largest economy and is one of the Congress-led government's most important proposed economic reforms.
The sales tax would replace multiple levies such as excise duties and service taxes and harmonise different tax levels across India's 29 states, which complicates the movement of goods.
"It is important to stay the course on tax reform," Finance Minister Pranab Mukherjee told parliament as he introduced the bill that seeks to amend the constitution to enable the introduction of the GST bill.
The GST plan must be approved by two-thirds of parliament and half of the country's states to become law, meaning the coalition will have to rely on rivals to see it through parliament.
However, some states and the main national opposition Bharatiya Janata Party (BJP) are opposed to the change.
Mukherjee tabled the legislation as he sought approval from parliament for the government's budget for 2011/12, which sharply hiked social spending while taking steps to reduce a wide fiscal deficit.
"To complete this legislative work, I seek the cooperation of the members belonging to both houses (of parliament)," the minister said told another raucous and bad-tempered session in the lower house.
The government has been hit by a slew of corruption scandals, ranging from the cut-price sale of telecoms licences to graft surrounding last year's Commonwealth Games.
To sweeten the budget's appeal, Mukherjee withdrew a proposed tax on health care services that had drawn widespread opposition.
Mukherjee also said it was important that parliament sanction the GST, which has been pending for several years, with the government hoping to introduce it in April 2012.
Comments
Comments are closed for this article.