At the stroke of midnight, President Pranab Mukherjee and Prime Minister Narendra Modi launched the ambitious pan-India indirect tax regime, the Goods and Services Tax (GST). The new tax reform subsumes at least 17 central and state taxes and 23 cesses and push the country towards a regime of 'one nation, one tax, one market'.
10 points on how India ushered in the historic GST:
1. The launch event was organised in the Parliament's Central Hall. Vice President Hamid Ansari, Speaker Sumitra Mahajan, Finance Minister Arun Jaitley, former PM HD Deve Gowda and senior leaders from various political parties barring Congress, TMC, DMK, RJD and Left, attended the event.
2. Addressing the gathering, PM Narendra Modi termed the GST as a 'good and simple tax' and said that it will end harassment of traders and small businesses while integrating India into one market with one tax rate. “The GST is a result of combined efforts of various political parties at different points of time,” he said.
3. “Today, the GST Council had its 18th meeting. It is a coincidence that the Bhagavad Gita also has 18 chapters,” said Prime Minister Narendra Modi.
4. GST, the PM said, is an example of cooperative federalism as the Centre and states together thrashed out the new law with consensus. Besides being a transparent and fair system that will end generation of black money and corruption, GST will promote new governance culture that will end harassment at the hand of tax officials, he said.
5. PM Modi quoted Albert Einstein, saying: "He had once said that if there is one thing that is most difficult to understand, it is income tax. I wonder what he would have said had he seen our tax system."
6. In his short address, President Mukherjee called the GST a ‘disruptive change’. He added that the ambitious central tax is a ‘tribute’ to the maturity and wisdom of India's democracy, as he recalled steps taken during his own tenure as Finance Minister on this key reform measure. "It is also a moment of some satisfaction for me because, as the Finance Minister, I had introduced the Constitution Amendment Bill on March 22, 2011."
7. "The new era in taxation….. is the result of a broad consensus arrived at between the Centre and states. This consensus took not only time but also effort to build. The effort came from persons across the political spectrum who set aside narrow partisan considerations and put the nation’s interests first. It is a tribute to the maturity and wisdom of India's democracy," the President said.
8. Addressing the gathering, Finance Minister Arun Jaitley said, “It will be an India that will write a new destiny...India can rise beyond narrow politics.” The GST may be a destination tax, but for India it will begin altogether a new journey, the FM said.
9. Congress boycotted the function. Former Prime Minister Manmohan Singh gave the GST launch ceremony at Parliament a miss. However, some constituents of the informal opposition grouping, including the NCP, Samajwadi Party, JD(U) and JD(S), attended the function. JD(S) supremo and former Prime Minister HD Deve Gowda, who was one of the special invitees along with Manmohan Singh, attended the function. NCP chief Sharad Pawar also attended the event. Among the other opposition parties which did not attend the function were the DMK, left parties, RJD and TMC.
10. From today, July 1, the GST will replace a number of central and state taxes. While some goods and service will become costlier, a number of items of daily usages will become cheaper. The powerful GST Council has kept 81 per cent of items below the tax bracket of 18 per cent. Also the bills that will be generated now onwards will carry GST rate in place of service tax, VAT and others.