Mar 09, 2015
From KPMG TaxWatch
On February 28, 2015, India’s finance minister presented the country’s much-anticipated budget, which includes numerous changes including pro-business incentives for infrastructure spending and reduced corporate tax rates for a period of four years. As expected, the finance minister announced the implementation of the goods and services tax (GST) for April 1, 2016. The proposed GST will streamline all of the current federal and state indirect taxes into a single tax for simplified tax administration and collection. The budget’s proposed changes to indirect taxes in the budget are directed toward the GST implementation. The budget would simplify the excise duty and service tax rates by removing two education-related surcharges. However, the service tax rate would be increased from 12 percent to 14 percent, and the excise duty rates for specific products would also be increased. In addition, the budget proposes to broaden the scope of the service tax by reducing the number of out-of-scope and exempt services. The government also aims to simplify doing business in India by allowing digitally signed invoices, maintenance of records in electronic form, and time-bound electronic registration processes.
The Indian government has recently presented to the Indian Parliament a proposed amendment to the Constitution that is required for the GST implementation. However, the federal and state governments are still discussing several issues such as the GST framework; the reorganization and harmonization with state governments; a mechanism to revolve GST disputes; and trying to meet the target date. For more information on changes in India, please contact Vinay Mohan at (312) 665-1138 or Frank Sangster at (267) 256-1680.
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The following information is not intended to be "written advice concerning one or more federal tax matters" subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.
The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.