India is set to implement a GST (Goods and Services Tax) regime from July 2017, considerably simplifying and rationalizing its tax regime for domestic goods and services. GST is set to replace a plethora of distortive taxes on goods and services provided and used in India by the Union and the State Governments.
Considerable preparatory work, including forming of GSTN (GST Network), an information technology backbone, and allocation of assessment and other tasks between the Union and the States, has been completed through consensus. Achieving such a consensus among the Union Government and 29 States including the State of Jammu & Kashmir has been a major achievement of India as a whole.
For GST taxpayers with turnover of less that INR 15 million, 90 percent will be assessed by the States, and 10 percent by the Union Government. For the taxpayers with turnover of over INR 15 million, the distribution will be on 50% each. It is essential that these allocations are done on scientific basis by an organisation such as GSTN, in which both the Union government and the States have a stake.