greater compliance, boosting Prime Minister Narendra Modi's economic credentials before a planned re-election bid in 2019.
A minute after the stroke of midnight, President Pranab Mukherjee and Prime Minister Narendra Modi pressed the button to launch the new indirect tax regime on a digital screen with "GST" emblazoned on it in a golden hue.Conceived on the principle of 'one nation, one tax, one market', the tax that subsumes 17 central and state levies was launched in the presence of Vice President Hamid Ansari, former Prime Minister H.D. Deve Gowda, Lok Sabha Speaker Sumitra Mahajan, Finance Minister Arun Jaitley, MPs, chief ministers, state finance ministers, officials of the Centre and states.
Notwithstanding the fact that the GST Law was a consensus product evolved over 14 years, the function in colorfully-decked Parliament House was boycotted by major opposition parties like Congress, Trinamool Congress, RJD, DMK and Left parties, saying the government was making a spectacle of a legislation for self-promotion, a charge Jaitley rejected. In keeping with his party's decision, former Primer Minister Manmohan Singh kept away from the event. However, MPs and leaders of Congress allies NCP and Samajwadi Party attended the function. Addressing the gathering, President Pranab Mukherjee said the introduction of GST is a moment of precedent for the country and a matter of personal satisfaction for him because of his role as Finance Minister earlier. "I had always believed that GST was a matter of time and was happy when it was enacted and I gave assent to the Constitution amendment last year," he said.
In his speech, Modi said the roll out of GST is the best example of cooperative federalism and success of Indian democracy. "The credit for the new law does not go to one party or one government but was a shared legacy of all," he said.
The GST process cannot be confined to just economic system but was a collective effort of all, he said, adding it was a product of long discussions among the best brains of the country. "It is an example of Team India's strength and ability," he said.
He described the GST as 'Good and Simple Tax' -- good because there will be no tax on tax and simple because there will be only one form of tax. It will also help eliminate black money and corruption because of the transparency it seeks to bring in, he said.
Welcoming the gathering, Jaitley described GST as the biggest and most ambitious tax reform which is an achievement of the country through consensus. It highlights the fact that India can rise above narrow politics and work for country's benefit. In making the GST, neither the Centre nor the states gave up their sovereignty.
In contrast to simpler sales taxes in other countries, India's GST has four rates and numerous exemptions. The official schedule of rates runs to 213 pages and has undergone repeated changes, some taking place as late as on Friday evening.
In a bid to mitigate the impact on the farm sector, the GST rates for tractors and fertiliser were slashed on Friday to 18 percent and 5 percent, respectively. HSBC estimates the reform, despite its flaws, could add 0.4 percentage points to economic growth.