For removing the cascading impact of taxes and for offering a nationwide marketplace for commodities, India is slowly moving towards the introduction of GST. In terms of the proposed tax reform, the State and the Central Governments would have a concurrent tax power for levying the taxes on the supply of commodities. It’s being expected that this proposed regime would help in improving the collection of tax and minimising leakage. This is because the State and the Central Tax Administration would monitor as well as assess the similar taxpayers. There are a number of challenges before the introduction of “Goods and Services Tax.” They may be classified into 2 broad headings i.e. Design of GST and the related structure, and GST administration and institution. On the designing related challenges, a broad consensus regarding the choice of neutral rates of revenue, harmonisation of the rate of GST across different states, harmonisation of the exempted list and excluded commodities and threshold for the compulsory GST registration across states still need to be reached.

Keywords: GST, VAT, GST for Businesses, GST for State and Central Revenue.