Stage is set for the launch of a nationwide Goods and Services Tax (GST) at midnight on Friday. Prime Minister Narendra Modi will unveil the new tax regime replacing overnight the messy mix of more than a dozen state and central levies built up over seven decades, with a one national GST unifying the country's USD 2 trillion economy and 1.3 billion people into a common market.
The GST launch, which will be held at the historic Central-hall of Parliament, will be attended by eminent personalities, including President Pranab Mukherjee. It will be a gala event at the circular-shaped hall that has been loaned for the launch of the historic reform.
The government promises that the transition to a single, nationwide tax on goods and services will streamline business and boost the economy by tearing down barriers between 31 states and union territories. It is estimated to add 0.4 per cent to 2 per cent to GDP growth. But some businesses are still figuring out how it will work as they race against time to adopt or upgrade cash registers and computer system so they are able to file monthly tax returns that comply with the new tax regime.
For some businesses, the GST is complex with four broad tax categories of 5, 12, 18 and 28 per cent, and myriad exceptions, as opposed to a simpler, flatter and broader sales taxes in other countries. Switchover to the GST has added to the worries of businesses that are still recovering from the November 8 shock decision to overnight remove 86 per cent of currency from circulation.
While it is correct to say that GST has been an important achievement of the Indian government as it will integrate the country into one market, its implementation will, however, be a challenge.
Nothing has been kept out of the ambit of the GST, even sports. Yes, after the implementation of the new tax regime, watching sporting events live in the stadiums are set to get costlier as it will attract up to 28 per cent tax.
All the popular league events in sports like the Indian Premier League, Pro Kabaddi League, Pro Badminton League will fall under the higher tax slab of 28 per cent. However, the events organised by the recognized sporting bodies will attract only 18 per cent on tickets. Meanwhile, tickets which are priced below Rs 250 have been exempted from GST.
Apart from tickets, sporting equipment will also burn a bigger whole in your pockets post the GST as the government has decided to categorise the sports goods industry in the 12-28 per cent. Currently, sports goods are listed under 2 per cent tax slab.