India rolls out biggest tax reforms since Independence

Posted July 01, 2017

For India it will begin altogether a new journey.

Union Minister M Venkaiah Naidu today dubbed incidents of lynchings in the country as "barbaric" and said they should not be seen from a religious angle.

The GST measures took more than a decade to get through parliament, with political disagreement resulting in the creation of four tax rates instead of a single one, as had been originally envisioned. "It will be an India where the Centre and the states work together cooperatively and harmoniously towards the common goal of shared prosperity", he said.

Speaking on the occasion, Modi said the GST was a fine example of cooperative federalism.

OneIndia has extensively covered the events leading up to the launch. I think. Petroleum and Real Estate will have to come to GST Council to be taxed. "Once the regime settles in, we can look forward to it spurring the economy by incentivizing manufacturing and making business decisions independent of taxes", Pratik Jain, Partner and Leader Indirect Tax, PwC India, said.

Former finance minister Yashwant Sinha as also Vijay Kelkar, who had first mooted the concept of GST in a report to finance ministry way back in 2003, were also present at the launch.

A Asaithambi, president, Tamil Nadu Fireworks and Amorces Manufacturers" Association, has said the "exorbitant' GST would affect eight lakh workers involved in the industry, which is already reeling under competition from China.

"With this, India has become one market of 125 crore people now". "This historic moment is culmination of a 14-year-long journey", President Mukherjee said. Women activists all across the country have questioned the GST Council whether 'sindoor 'or sanitary pads are more necessary for women.

India made the biggest tax system reform in its history when it transitioned to the goods and service tax (GST) regime on Friday night. "It will completely transform the indirect taxation landscape in the country involving both the central (federal) and state levies".

Modi also said that GST would eliminate the compounding effects of multi-layered tax system.

The new prices of Goods and Services will now be based on a tax slab of 5%, 12%, 18% and 28%.

While many basic staples like fresh vegetables and milk have been exempted from tax, along with some less obvious items like temple offerings, the national flag and human hair, so-called "sin" goods like tobacco will be slapped with extra levies.

"There is an imminent threat of inflation and an all round increase in the prices of consumer goods".

Analysts expect economic growth to slow down over the next few months, but say it should pick up after the tax is fully implemented. Numerous tiny business units that operate without even a computer to do accounting will have to invest and hire a chartered accountant's service to comply with the new regime. "It hits textiles sector - micro and small manufacturers, traders, shopkeepers and helps big businesses", he added.