Although it is expected that existing incentives would be protected under GST by way of cash refunds/investments-based cash subsidies, the mechanism to obtain the same is not clear.

Currently, Indian businesses have been grappling with a complex indirect tax structure, coupled with multiple taxes imposed on transactions in relation to goods and services. However, a respite can be expected since Indian indirect tax system is set to undergo a change by adopting Goods and Services Tax (GST), which is expected to make indirect taxes simpler, transparent and taxpayer-friendly.

Due to lack of consensus between Center and States on necessary Constitutional amendments, GST is likely to miss the revised deadline set by the government for April 1, 2011. However, GST being a transaction-based tax, can be rolled out anytime in the next fiscal without any major concern.

The discussion paper released by Empowered Committee of State Finance Ministers confirmed India adopting a dual structure of GST, wherein both Center and the States would collect GST i.e., for each supply/service, the Center and State would collect Central GST (CGST) and State GST (SGST) respectively.

GST is proposed to subsume Central taxes such as Central Excise Duty, Additional Excise Duties, Excise Duty levied under the Medicinal and Toiletries Preparation Act, Service Tax, Additional Customs Duty commonly known as Countervailing Duty (CVD), Special Additional Duty of Customs (SAD), Central Surcharges and Cesses.

The Analyst Magazine, Indian Businesses, Indian Indirect Tax System, Value-Added Taxes, Integrated GST Model, Industrial Units, Distribution Patterns, Telecom Services, Central Taxes, Additional Excise Duties, Central Excise Duty.