Cabinet clears bill for nationwide goods and services tax

NEW DELHI (Reuters) - India's cabinet approved a constitutional amendment bill on Wednesday to rationalise state and central indirect taxes into a harmonised goods and services tax (GST), a government official told reporters.

The amendment will be introduced in the current parliamentary session concluding next week, said the official, who attended the cabinet meeting but declined to be named as he was not authorised to speak to the media.

Investors and manufacturers have long advocated the GST as a way to simplify taxes while broadening the tax base, adding as much as 2 percentage points to economic growth in Asia's third-largest economy.

However, the measure has been held up for years due to a lack of political consensus. Some of India's 29 states were reluctant to give their assent for fear of revenue losses.

Finance Minister Arun Jaitley brokered a compromise on Monday, offering to compensate the states for any loss of revenues following the implementation of the GST.

The government aims to bring the tax into effect from April 1, 2016.

(Reporting by Nigam Prusty and Rajesh Kumar Singh; Editing by Tom Heneghan)