REPORT BY THE SECRETARIAT: SECTION III: TRADE POLICIES AND PRACTICES BY MEASURE: (3) MEASURES DIRECTLY AFFECTING EXPORTS
Question 31: It is reported that India plans to reform its VAT system in respect of goods and labour service. Please provide relevant background information and describe the progress of this reform. Please also provide information on India's export rebate system in respect of goods and labour service.
Reply: India proposes to introduce a comprehensive Goods and Service Tax to replace the existing system of domestic taxes both at the Centre (excise duties and services tax) and the States (state VAT, sales tax etc.). Since India is a multi party and a federal country, discussions are underway between the central and States governments to finalize the design and structure of this tax. In the meanwhile, the Central Government has introduced a Constitution Amendment Bill in Parliament in February2011 to enable the two levels of Government to levy this tax.
