At the stroke of the midnight hour on Friday, Independent India’s biggest tax reform, the Goods and Services and Taxes (GST), was rolled out at a special ceremony at the historic Central Hall of Parliament.
As the event was held to signal India’s economic emancipation from a burdensome tax regime, Prime Minister Narendra Modi pledged to take the country on a higher growth path, riding on a clean and transparent system.
“At midnight, we are going to chart a new path for the nation. This is not an achievement of one party or one government but work of all governments and parties,” he declared.
President Pranab Mukherjee signalled the formal launch by pressing a button. The President recalled the efforts put in by various governments and political parties to make GST a reality.
Finance Minister Arun Jaitley said GST is “one tax, one market and one nation.”
Former prime minister H D Deve Gowda, Lok Sabha Speaker Sumitra Mahajan and Vice President Hamid Ansari were also present.
Another former prime minister, Manmohan Singh, was invited, too, but the Congress led a boycott of Opposition parties, including the TMC, DMK and the Left, calling it a publicity stunt by Modi.
However, representatives from Bihar Chief Minister Nitish Kumar’s JD(U), the SP and NCP, besides several BJP ministers and leaders, were present. Prominent citizens from the industry, cinema, sports, social work and other sectors attended the event too.
Different from others
India differs from other countries that have implemented GST.
The GST Council has come out with a four-rate structure: 5%, 12%, 18% and 28%. A higher tax rate of 28% is imposed on luxury and sin goods in the new tax regime.
Under GST, all transactions and processes will be done through electronic mode to ensure non-intrusive administration.
Just a couple of hours before the rollout, the GST Council reduced the tax rate on fertiliser to 5% from the previously decided 12%.
The GST Council, in another move, also cut the tax rate on exclusive parts of tractors from 28% to 18%. Jaitley, who presided over the last GST Council meet before the rollout, said the rate reduction for fertiliser will take care of any increase in burden on farmers.
Jaitley promised increased revenues through GST will be used in reducing the burden of income tax on the salaried class.
For the protection of consumer rights, the new law provides anti-profiteering provisions.