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Goods and Services Tax (GST) system of Indirect taxes across the globe is showing an increasing trend with more than 160 countries, including 33 of the 34 member countries of Organization for Economic Co-operation and Development (OECD), employing VAT as the preferred form of consumption tax1 (refer Graph 1 below). Malaysia is the recent country to implement GST effective 1 April 2015 and current Indian government has announced a timeline to introduce GST in India by 1 April 2016. This increasing trend towards VAT/GST can be attributed to key factors such as,

• 1. VAT/GST preserves neutrality by taxing the value added by each factor equally;
• 2. Consumption tax is large and more stable source of revenue;
• 3. Potentially self-enforcing in nat