GST Highlights: Top remarks by PM Modi during midnight session in Parliament

Earlier, hailed as the "most ambitious economic reform" in India, the GST was launched during a midnight session of Parliament in the presence of President Pranab Mukherjee, Vice President Hamid Ansari, Prime Minister Narendra Modi and Lok Sabha Speaker Sumitra Mahajan and other dignitaries.

"From Leh to Lakshadweep, India will now have one tax".

About 1,000 people packed the hall when Modi began to speak from where India declared itself a free nation and first Prime Minister Jawaharlal Nehru made his famous "tryst with destiny" midnight speech nearly seventy years ago.

However, GST will make India a common market with common tax rates and procedures and remove economic barriers.

"The new era in taxation, which we are about to initiate in a few minutes, is the result of a broad consensus arrived at between the Centre and states", Mukherjee said. "It signals to investors the government's ability to deliver on its reform agenda". They had urged the government to postpone implementing the new system to give businesses a chance to recover from Modi's snap decision late a year ago to remove 86 percent of the currency in circulation. GST is such a catalyst that will end the imbalance in India's development. This committee will be the authority responsible for taking care of the grievances to ensure that the benefit of GST upon the lower tax rates doesn't get tampered.

The Kashmiri Traders and Manufactures Association sat on protest against the one nation one tax policy under GST demanding a separate GST tax for Jammu and Kashmir. The GST embodies several taxes like Central, State, local taxes and cess levied on goods and services in single tax. The minister said the reports of a businessman being burdened with filing 37 returns in a year under the new tax regime are totally unfounded. Most economists agree the reform - first proposed in 2006 - is long overdue, but warn the initial shock to the economy is likely to drag, rather than stoke, growth in the short term as businesses adjust.

But there bright spots. "Congratulation to PM @narendramodi ji for unifying the nation economically".

As the GST is a value added tax, firms will have an incentive to comply in order to avail credit for taxes already paid.

Speaking on the occasion, the prime minister said that the day marks a decisive turning point, in determining the future course of the country. Currently, it has multiple tax rates ranging from 0% to 28% along with a cess on some goods for lobbying and rent seeking.

  • Joey Payne