Dual Goods and Service Tax

See that the GST in it's pure form can only be imposed by the Centre and Former Finance Minister Mr. Mr. P. Chidamram has also asserted in one of his Budget speech this fact. Now in our system of Governance the states will not be ready to surrender their right to tax. Hence there is a talk of Dual GST. But it will be a compromise the true nature of GST.

As far as states revenue is concerned, it can always be taken care of in GST. The real issue is slightly different.

Power to Tax is not merely a revenue generattion exercise- it is a power in the hand of states, and so in the hand of politicians and bureaucrats. It is also a source of corruption for states political and administrative machinery. It appears that people are not willing to forgo this power. It is power politics.

One of the solution is implement GST in the wiling states. With the benefit of GST, trade and industry will shift to those states where it is implemented. Such shifting of trade and industry will force the other states to follow. Same thing which happened with VAT. I think that will happen.