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Preparing the way for a modern GST in India

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  • Sijbren Cnossen

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. Copyright Springer Science+Business Media New York 2013

Suggested Citation

  • Sijbren Cnossen, 2013. "Preparing the way for a modern GST in India," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 20(4), pages 715-723, August.
    • Handle: RePEc:kap:itaxpf:v:20:y:2013:i:4:p:715-723
    DOI: 10.1007/s10797-013-9281-0
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    References listed on IDEAS

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    1. Zee, Howell H. & Stotsky, Janet G. & Ley, Eduardo, 2002. "Tax Incentives for Business Investment: A Primer for Policy Makers in Developing Countries," World Development, Elsevier, vol. 30(9), pages 1497-1516, September.
    2. Charles McLure, 2000. "Implementing Subnational Value Added Taxes on Internal Trade: The Compensating VAT (CVAT)," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 7(6), pages 723-740, December.
    3. Ahmad, Ehtisham & Poddar, Satya, 2009. "GST reforms and intergovernmental considerations in India," LSE Research Online Documents on Economics 38346, London School of Economics and Political Science, LSE Library.
    4. Michael Keen, 2009. "What Do (and Don't) We Know about the Value Added Tax? A Review of Richard M. Bird and Pierre-Pascal Gendron's The VAT in Developing and Transitional Countries," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 159-170, March.
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    1. repec:era:chaptr:2013-rpr-07-05 is not listed on IDEAS
    2. Tristan Leo Dallo AGUSTIN & Martin SCHRODER, 2015. "The Indian Automotive Industry and the ASEAN Supply Chain Relations," Working Papers DP-2015-24, Economic Research Institute for ASEAN and East Asia (ERIA).

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    More about this item

    Keywords

    India; GST; VAT; Tax assignment; H25; H71; H77;
    All these keywords.

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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