Abstract:
A modern Goods and Services Tax (GST) would do much to alleviate the
problems of India’s current indirect tax system which is a serious impediment to the
formation of a single common market and further economic growth. The Centre and
the States should both have access to the full GST base, which means that the tax assignment
issue (who should tax what?) should be separated from GST design aspects
(what should be the precise base and rate structure?). It is not necessary or desirable
to have a uniform GST for the Centre and the States. Neither is an integrated GST to
tax transactions between States required. Last but not least, the system of taxation by
classification and valuation should be replaced by a self-assessment system mainly
monitored through checks upon books of account.
