Indirect Tax Reforms

Indirect Tax Reforms: Challenge And Response

by V.S. Krishnan

The book seeks to examine the reforms in three individual segments of Indirect Taxation—Central Excise, Customs and Service Tax. These together constitute 60% of the total tax revenues in the country. While the three taxes are all indirect taxes, the dynamics of reform in each of these individual segments has been different. The book seeks to examine the tax reforms in each. These reforms have influenced the fortunes of a large number of manufacturing sectors. However, in respect of two—Petroleum and Textiles—the influence has been significant. In two separate chapters, the past impact, the present changes and the future course of action have been outlined. The book also has separate chapters on Central VAT and the proposed State VAT.

The book is structurally divided into two parts. Part I deals with the past and present reform measures, while Part II examines the future course of indirect tax reforms. The book argues that tax reform is a “Work-in-Progress”. Expansion of the tax base is an important theme in all the chapters. One immediate fallout of the tax reform in India has been the declining tax to GDP ratio, but this may improve with policy initiatives to widen the tax base especially in the area of Service Tax, phasing away of indirect tax exemptions and nationwide implementation of State VAT.

The book also looks at the indirect tax administration. Design of a modern tax administration is extremely important to make the tax administration more assessee friendly and revenue efficient. By laying out a road map for the future, the book offers useful suggestions for indirect tax reforms to the policy makers.

About The Author:-

Shri V.S. Krishnan completed his Masters in Economics after which he taught Economics for two years in Delhi University. Subsequently, he joined the Indian Customs and Central Excise Service in 1979. Shri V.S. Krishnan has held a number of important assignments with the Government of India including a four year stint in the Tax Research Unit of the Ministry of Finance during which period he was associated with the formulation of four Union Budgets and was also associated with the introduction of MODVAT in 1986. This was followed by an assignment in the National Wasteland Development Board (Ministry of Environment & Forest). The author was conferred with the Presidential Award in 1999 for specially Distinguished Record of Service.

He is currently associated with the ACES (Automation of Central Excise and Service Tax) and the ADB assisted capacity development projects. He has been regularly writing on matters relating to Taxation (including VAT) in the editorial page of the Economic Times. He is currently posted as Commissioner of Central Excise, Pune-1 Commissionerate.