GST may be in place by April 2017. The proposed levy will be a single tax that will cover all levies at the Centre and state levels, including entry tax. It is a value-added tax, which means a levy at each stage of production, sale or consumption will be set off against taxes paid in the previous stage. It is expected to benefit consumers and help government revenues and add to overall economic growth.

States want the GST rate to be upward of 20 per cent to protect their revenue. The one nation, one tax regime is expected to help Karnataka’s growth and also help draw investments. West Bengal which had strongly supported passage of the bill seems to have adopted a wait-and-watch policy as it has deferred the date for the debate on the issue. Karnataka is also taking its own time to approve the legislation.

Once GST comes into effect, all central- and state-level taxes and levies on all goods and services will be subsumed within an integrated tax having two components: a central GST and a state GST. This will ensure a complete, comprehensive and continuous mechanism of tax credits. Under it, there will be tax only on value addition at each stage, with the producer/seller at every stage able to set off his taxes against the central/state GST paid on his purchases. The end-consumer will bear only the GST charged by the last dealer in the supply chain, with set-off benefits at all the previous stages.