In the Union Budget of 2006-2007 the finance minister had proposed that India should move towards national level Goods and Services Tax (GST) that should be shared between the Centre and the States. However, GST is still to be implemented by the Indian government.

Commenting on the expected date of introduction of GST, Revenue Secretary Sunil Mitra said the government could not implement GST without a constitutional amendment. He expects the ministry panel to meet on GST by October end.

There have been various recommendations and suggestions from various states. Mitra said the government could not accommodate suggestions by Madhya Pradesh and Gujarat as these suggestions do not allow features of GST to work.

Mitra also said that direct tax collections for the period between April to August were robust, adding that tax compliance seemed to have been increased.

There have been incomprehensible profits being claimed as deductions and these distortions were serious because of the profit-linked exemptions, he added.

The profit-linked tax exemptions, however, will soon be withdrawn with the introduction of the Direct Tax Code (DTC) in 2012-2013. The DTC introduction, the government hopes, would rake in around Rs 55,000 crore in revenue.