Continued VAT uptick suggests states likely to benefit from GST

As in the previous three years of high economic growth, states' value-added tax revenue has continued to grow faster than their other major sources of “own tax revenue” (OTR) like stamp duty and excise on alcohol in the post-economic-crisis period, the Reserve Bank of India's latest report on state finances reveals. This confirms that there is little rationale for many of the country's largest states to be sceptical of the proposed goods and services tax (GST), the logical extension of the VAT system.

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