The government should subsume all Central and state level indirect taxes into proposed Goods and Services Tax (GST), industry chamber CII has said.
The chamber favours consolidation of all indirect taxes levied by states on goods and services such as VAT, purchase tax, cess and surcharge, luxury tax as well as octroi/entry tax collected by municipalities, barring property tax, CII Task Force Chairman Sunil Munjal said in a release.
“Similarly Central GST should subsume Union Government levies like excise duty, cess and surcharge on certain goods, service tax and education cess,” Munjal said.
The chamber suggested that both central as well as state GST should have a hormonised system for nomenclature of goods to give uniformity to classification of goods.
It said that the dual GST should be levied on a common base price from manufacturing to retail stage on goods and similarly on services.
Munjal said, it would be of great help to assessees, if the Empowered Committee of State Finance Ministers, which is working on GST, brings out a model GST Act, rules and return forms for legislation by all states.
As regards inter-state movement of goods Munjal said, CII favours collection of tax at the point of origin at the applicable GST rate and transfer to the destination state for inter-state sales as well as stock transfers.
At present, Central Sales Tax of two per cent is imposed on inter-state sales but it requires collection and submission of statutory ‘C’ forms from the buyer which is a cumbersome process.
Once the GST is implemented, the chamber expects removal of state barriers which restricts inter-state movement of goods and causes delay in transportation of goods.
On taxation of petroleum products, it said it is desirable to bring these under GST regime.
“In case, it is not found feasible due to socio-economic consideration, the alternative is to bring all petroleum products under GST with the facility of input tax credit, it said.
It added that over and above this tax, additional tax could be imposed without tax credit may be levied on motor spirit and high-speed diesel by both the Centre and state.
GST is scheduled to be introduced from April 1, 2010.
However, many of the agreements are yet to be reached between the Centre and states like the rate, the goods and services to be included in the proposed tax.
