Goods and Service Tax (GST) in India: Need & Hurdles

Indirect tax is a tax which imposed on almost each and every citizen of the country. The present tax system in India is mainly divided into two parts i.e. Direct Tax and Indirect Tax. After independence, several reformatory measures were adopted to make the tax structure rational, fair, taxpayer friendly and. By removing Sales Tax System, VAT regime were started in 2005 and since last 5 years Goods and Service Tax (GST) proposal is waiting for getting approval from both the houses of the Parliament to introduce an uniform indirect tax regime in the country. Indirect taxes are the main source of revenue at both Central and State level but the present system are very complex and regress in nature. The proposed goods and services tax will eliminate this complexity and also help to broaden the tax base. The main objective to introduce GST is to replace number of central and state government's indirect taxes in a single GST.

This paper is an attempt to examine the basic feature of proposed GST and to identify its need in the present era of Globalization. The paper also aims to identify the hurdles in reaching at a agreeable structure between Central and States. It is expected that the GST would be a game changing indirect tax reform after independence but its trail in a federal country like India a major hurdle in implementing the GST. This paper also aims to identify the hurdles and suggest possible and practical solution to the problem.