Finance minister K M Mani said that the proposed Goods and Service Tax regime, which he called the most crucial tax reform in the country, would revitalise the economy.

The country is expected to gain additional revenue of around Rs one lakh crore annually as a consequence of its implementation, he said.

Mr Mani, who is also the chairman of the Empowered Committee on GST, said that the new GST system should be implemented in such a manner that the tax payers, those mobilising tax, the government and the economy should find it more welcome than the existing value added tax (VAT) regime.

"Steps are being taken to achieve such a goal," said K M Mani at a session on 'Service Tax and Implications of GST' organised here on Monday by the Gulati Institute of Finance and Taxation and the Confederation of Indian Industry.

"As the chairman of the Empowered Committee, my major task is to evolve a consensus on a mechanism that would be favourable to all the states in the country," Mr Mani said.

He said that the Centre and states should arrive at a consensus on various factors for the efficient implementation of GST.

"Consensus has already been reached on a number of issues. However, some important issues remain," he said. Mani expressed the hope that it would be sorted out in 11 months.

He said the VAT system which took the place of the sales tax regimen in 2005 was a crucial step forward in the reform of the country's tax structure.

"The VAT system had rejuvenated trade in the country as expected. VAT has been one of the major factors that led to the exemplary growth achieved by the country during 2005-06," Mani said.

The finance minster said that lower tax rates and simplified laws were major enablers for investors. "Income has shown a marked increase even after taxes were reduced. This has been achieved mainly as a result of a widening of the tax base and the simplification of tax laws and tax submission procedures," he said.