India set to implement biggest tax reform

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Prime Minister Narendra Modi with President Pranab Mukherjee, Vice President Hamid Ansari, Finance Minister Arun Jaitley and other dignitaries at the Central Hall of the Parliament. It is significant that the Gita has 18 parts. "Congratulation to PM @narendramodi ji for unifying the nation economically".

But the prime minister, who has put huge efforts into the economy as he targets re-election in 2019, acknowledged there would be teething troubles.

"Yes, there are some who are not comfortable with technology". The GST will improve the ease of doing business for corporates.

It's historic in the sense that both the centre and the states have yielded ground on their taxation rights, after 17 arduous years of negotiations by successive governments at the centre and in the states.

With abolition of border check-posts, GST will ensure that inter-state movement of goods is not delayed, he said.

GST will chart new course for nation. The move should eventually expand India's narrow tax base and increase government revenues.

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Union Home Minister Rajnath Singh assured that the GST would unleash the true potential of the huge market in India.

"I think India will grow faster, better, our economy and all the states will be benefitted. This is not an achievement of one party or one government but work of all governments and parties", he declared. It will replace a complicated mix of 500 types of state and federal tax, Modi said.

The GST was launched at midnight at a function inside Parliament's Central Hall. The introduction of GST is a momentous event for the country and moment of personal satisfaction for me.

However, Jammu & Kashmir, which supports the levy, is yet to implement it. The first fallout was seen yesterday when the southern state of Tamil Nadu announced a 30 percent levy on movie tickets, in addition to the 28 percent GST fee. "At the end of the year, this information will be consolidated and on the basis of that final return, his annual assessment will be done", said Jaitley, speaking at a show of India TV which will be live on Saturday at 10 p.m. It is estimated to add 0.4% to 2%to GDP growth.

Principal Revenue Secretary Somesh Kumar has warned traders that the additional one % benefit should be passed on to consumers with logistics in place and benefit of input tax credit.

Hours before the midnight launch, the GST Council, the highest decision making body that formulated the rules and tax rates, met for the eighteenth time.

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