Intergovernmental Considerations of GST in India

The replacement of the national turnover tax by the value added tax in 2005 marked a major step forward in the reform of the domestic tax reform in India. State Secretary of Finance Asim in this report, led by the chairman Dasgupta undertaken the first has been sold have said distortion at the time and complexity related to taxes and a significant simplification of the structure and rates due to the expansion of the tax base in the old system. State VAT was designed with mainly based on the blueprint of the recommendations in the report Amatech Bagchi (after Bagchi Report) 1994 National Public Finance Policy Research Institute, led the team prepared. 1 Bagchi Report has clearly recognized that the multinational enterprise system is not the perfect solution for the tax problem in domestic trade by recommending the VAT (State Added Tax or VAT). However, the team felt that this was the only viable option within the existing framework of the Constitution and would form the basis for a more rational system in the future.