The unified goods and services tax (GST) is unlikely to come into force from April 1, 2010 - the deadline fixed by central government - due to stiff opposition by some Indian states. GST is aimed at integrating the tax structure in the country, by doing away with different levies and tax rates by states and the union. It will unify direct and indirect taxes, which would be levied at the point of sale instead of point of origin.

The new tax regulation has been opposed by governments of Madhya Pradesh, Chhattisgarh and Tamil Nadu, cautioning the central government against its immediate roll out in the country. Meanwhile, the central government may extend the time line for implementing GST after thoroughly discussing the matter with the authorized committee of state finance ministers.

Tax experts have also urged the Center to go slow on GST implementation, keeping in mind the ground realities prevailing in the market. Ernst & Young partner, Satya Poddar, said: “They should have been drafting the law by now. They have not started work yet. It takes 3-4 months. As of now, nobody in empowered committee is even working full time on this. You can’t have a major tax law like this.”

Govinda Rao, a member of the Prime Minister’s Economic Advisory Council, has also urged Prime Minister Manmohan Singh to delay the implementation of new tax rule till the Center and the states reach a consensus. The move was also said to be opposed by K Anbazhagan, Finance Minister of Tamil Nadu, who termed it as ‘premature’ and called it a threat to the fiscal autonomy of the states.