On the direct tax side, the Ministry of Finance made public its ongoing task of rewriting the Income Tax Act towards simplifying the law that exists and also with a view to broaden the tax base as suggested by the Kelkar Committee (Task Force on Direct Taxes).
On the indirect tax frontier, the then Finance Minister Mr. P. Chidambaram went a step ahead than that suggested by the Kelkar Committee (Task Force on Indirect Taxes) and made clear the intent of the Government to adopt a harmonized system of taxation of commodities by transforming the hitherto operational regime wherein sales tax (or VAT) was charged and levied by the State Governments and tax on services being levied by the Central Government.
Unarguably the desire to streamline the existing indirect tax structure with a harmonized and uniform levy is only in furtherance of the national aspirations of a rational tax structure which not only avoids the cascading effects but also promotes the entrepreneurial initiatives and economic activity on the whole.
Pursuant to our initiate "of providing insights into law's whys and hows", we have worked upon a research paper on 'Goods and Service Tax (GST)' as envisaged for India. We hope it would provide useful insights to the reader as to the proposed changes and the benefits envisaged in this transformation to GST.
Have a look at this paper uploaded at SSRN.
November 2009 supplement:
You can read the latest on GST at this link "Discussion paper on GST unveiled"