What Is Inter-State Sales Tax In The GST Bill?

One of the crucial elements of the GST Bill, is the inter-state sales tax. The Congress wants this dropped, while the BJP led NDA is in favour of the same.

Interstate-sales tax is basically being levied in the Bill, to compensate manufacturing states like Gujarat, Maharashtra and Tamil Nadu.

Some of these states, particularly Tamil Nadu were earlier opposed to the GST Bill on account of a fear that it would lead to a loss of revenues for them as the state has big manufacturing facilities.

Interstate Tax was one element of the Bill, which hoped to compensate such losses. As we write the government is looking to reach an understanding with the Congress Party on the 1% inter-state sales tax.

If that is not part of the Bill, the government will have to think of ways and measures to compensate the states.

The Goods and Services Tax remains one of the most important pieces of tax reforms, the country has seen since independence.

It is hoped that the Bill would be passed in the winter session of parliament, as it is not yet passed in the Rajya Sabha. However, the Bill to sail through needs a 2/3 majority in the Rajya Sabha. The government is trying to evolve a consensus with the opposition parties, particularly the Congress. It is hoped that this times we would see the passage of the Bill.

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