India’s GST (Goods and Services Tax) reform represents a fundamental break in tax arrangements for goods and services, requiring a Constitutional change (122nd Amendment to the Constitution). This has enabled states to levy tax on supply of services, and the Union Government to levy tax on supply of goods.
Among the complexities of India’s GST are its dual nature (GST by the Union government, and by the States); its multiple rate structure, a shift from origin (where production takes place) to destination (where consumption or supply takes place); establishment of GST council to which both the Central Government and 29 State Governments have ceded some tax authority; and an establishment of a centralized IT platform for some components of administration, called GSTN,or GST Network in a Public Private Partnership (PPP)mode.
The stakeholders recognize that the potential benefits of GST in creating unified internal market, and lowering supply chain logistics and compliance costs crucially depend on smoother GST implementation.
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