A sales tax revolution took effect in India on Saturday after a midnight ceremony in parliament.<br /><br />Prime Minister Narendra Modi and President Pranab Mukherjee together launched the new Goods and Services Tax (GST) by pressing a button.<br /><br />The nationwide system replaces a complex set of federal and state levies and is India’s biggest tax reform in the 70 years since independence from British colonial rule.<br /><br />The aim is to harmonise the economy, simplify and modernise business and fuel growth – moves that would boost Modi’s credentials before a planned re-election bid in 2019.<br /><br />“With GST, the dream of ‘One India, Great India’ will come true,” Modi said.<br /><br />He told a select gathering that the tax was a catalyst to “remove the imbalance in trade in the country” and “give a boost to the promotion of exports”.<br /><br />Friendly towards the common citizen, advantageous for industry, a simple tax structure & economic integration…here is more about GST. pic.twitter.com/EbuhuUKSsN— Narendra Modi (@narendramodi) 1 juillet 2017<br /><br />Modi was joined by his cabinet colleagues, India’s central bank chief, a former prime minister and major company executives including Ratan Tata.<br /><br />The launch, however, was boycotted by several opposition parties including the Congress Party, which first proposed the tax reform before it fell from power three years ago.<br /><br />Former Prime Minister Manmohan Singh – the architect of India’s economic reforms – also gave it a miss.<br /><br />Some small business owners are also nervous about the changes and a number of shops lowered their shutters in protest.<br /><br />Far from making life easier, critics say the new system is complex and confusing with different rates and numerous exemptions.<br /><br />It has taken 14 years for the new sales tax to come into being. <br /><br />Compliance is feared to be a major challenge in a country where many entrepreneurs are not computer literate and rely on handwritten ledgers.<br /><br />Poor implementation would deal a blow to an economy that is still recovering from Modi’s decision late last year to outlaw 86 percent of the currency in circulation.<br /><br />Consumers are also feeling uncertain – not knowing what the new sales tax would do to prices.<br /><br />Hence a frenzy to snap up bargains in India on the eve of its introduction.<br /><br />India is bracing for economic chaos from the launch of PM Modi’s big tax overhaul soon https://t.co/03wuZ7kM8l pic.twitter.com/RaxO5PLp6i— Bloomberg (@business) 30 juin 2017<br /><br />with Reuters<br />
