On the stroke of midnight, India will wakeup to GST & What you should know about it?
When the clock ticks 12 tonight, Prime Minister Narendra Modi will unveil the new tax regime unifying the country's USD 2 trillion economy and 1.3 billion people into a common market.
India’s single biggest tax reform, Goods and Services Tax (GST), will be launched nationwide in the intertwining night of 30th June and 1st July 2017. The new tax regime will be unveiled by Prime Minister Narendra Modi at a function in Central Hall of the Parliament.
The tax regime will replace more than a dozen state and central levies like excise, service tax and VAT, which were built up over seven decades. With this, GST will be unifying the country’s 2 trillion dollar economy and 1.3 billion people into a common market.
The special programme for the launch of the new tax regime will be attended by President Pranab Mukherjee, Prime Minister Narendra Modi, Finance Minister Arun Jaitley and a host of Senior Ministers and bureaucrats.
President Pranab Mukherjee, who will be the participant on the occasion, is the same person who back in 2011 moved the Constitution Amendment Bill for bringing GST. At that time, he was serving the nation as its finance minister under UPA regime.
Besides, former prime ministers Manmohan Singh and H D Deva Gowda are also invited on the occasion of this mega launch of GST, a new taxation system that is set to dramatically re-shape the over USD 2 trillion economy.
But with Congress deciding to boycott the event, Singh may not be seen on the seat reserved for him on the dais.
Earlier on 28 June 2017, the Union Government notified that the Goods and Services Tax (GST) will be rolled out from 1 July 2017. After this notification, a mega rehearsal of the occasion was conducted in the Central Hall. Reports suggest that the mock drill was conducted around 10 pm to ensure that all things were in place during the main event.
Finance Minister Arun Jaitley on the day of notification said the Constitution does not give the luxury to delay the nation's biggest economic reform by six months. He said deferring GST is a constitutionally impossible thing. He also said that the date of GST implementation, rules and tax rates had been decided through a consensus by the GST Council.
He said the Constitutional amendment approved by Parliament in 2016 gave time only until 15 September 2017 to replace the existing indirect tax structure by the GST.
The minister said, in absence of the GST, there will be a constitutional crisis as no tax can be levied on goods and services.
Estimations suggest that this transition of the nation to a single tax will add about 0.4 per cent to 2 per cent to GDP growth.
The idea of GST was first proposed in 2003 but was bogged down for years in the bipartisan debate in which the ruling party always tried to push it while the opposition managed to drag it down. Before Modi came to power on 26 May 2014 (three years ago), his party was not particularly in favour of the GST.
Over 1200 items, from shampoo to tea to automobiles, have been put in four broad tax categories. The four tax categories are of 5%, 12%, 18% and 28%.
As decided, unbranded food staples including vegetables, milk, eggs and flour will be exempt from GST, along with health and education services. However, Tea, edible oils, sugar, textiles and baby formula will attract a 5% tax.
Plan to Boycott the occasion
Reports suggest that Congress party along with Left, RJP, SP and TMC has decided to boycott the event apparently to protest against hardship being caused to small and medium enterprises and traders.
Finance Minister Arun Jaitley has made a last minute appeal to the opposition to reconsider their decision saying the landmark indirect tax reform was a result of a joint decision and they cannot run away from it now.
Information and Broadcasting Minister M Venkaiah Naidu has termed the Congress decision of boycotting GST launch as unfortunate. Naidu said, all the decision regarding the GST were taken by consensus among the States and all political parties. The launch event will start at 11 pm on 30 June 2017 and extend into the midnight, coinciding with the rollout of the GST regime.