The present indirect tax regime is complex and entails multiple taxes and duties. Further, there is a significant cascading effect of taxes on account of various restrictions on cross utilization of credit of one tax against another. In addition to this, multiplicity of returns and compliances at State level, administrative costs,way bills requirement for inter-state movement of goods, add to the procedural compliances to be followed by the assess.Introduction of a GST to replace the existing multiple tax structures of Centre and State taxes are not only desirable but imperative in the emerging economic environment.

The Goods and Services Tax (GST) is a destination-based value added tax, levied at all points in the supply chain with credit allowed for tax paid on purchases used in making the supply. It would apply to both goods and services in a comprehensive manner with exemptions restricted to minimum.The dual GST which would be implemented in India will subsume many consumption based taxes. At central level, Central excise duty, Additional excise duty, Service tax, Countervailing duty (CVD)and Special Additional Duty (SAD) and at State level, VAT/Sales tax, Octroi and Entry Tax, Purchase tax, Luxury tax, Entertainment tax and taxes on lottery, betting and gambling would be subsumed.