President Pranab Mukherjee and PM Modi press the button to officially launch GST at midnight on July 1. Photograph: (Twitter)
India's sweeping tax reform, the Goods and Service Tax came into force at the stroke of midnight Friday with a special session of Parliament attended by Indian lawmakers and top executives of companies.
President Pranab Mukherjee and Prime Minister Narendra Modi pressed the button to officially launch the landmark tax reform.
BJP leaders LK Advani, Amit Shah, Nitin Gadkari, Venkaiah Naidu and Hema Malini, Samajwadi Party's Amar Singh, Lok Sabha Speaker Sumitra Mahajan, and industrialist Ratan Tata were among the sea of dignitaries were spotted at the midnight ceremony.
In his address to Parliament, President Mukherjee called the GST a "tribute to the maturity and wisdom of India’s democracy" and said it had been arrived at through a broad consensus between the Centre and the States.
"The new era in taxation is the result of a broad consensus arrived at between Centre and States," the President said.
PM Modi began his address to Parliament by paying tributes to leaders of the freedom struggle including Jawaharlal Nehru, Sardar Patel and Maulana Azad.
He also credited predecessor governments (United Progressive Alliance) and Opposition parties that co-authored independent India's biggest tax reform.
Calling GST a "shining example of co-operative federalism", PM Modi said a the tax reform was a collective process harboured by different teams at different times in history.
"GST is a shining example of co-operative federalism which will give us even more strength to walk together," PM Modi said in his address to Parliament. "It is a great testament to India's democracy and cooperative federalism."
"The present GST is the result of a long period of debates and discussions. It is an example of Team India's collective effort," PM Modi said. "There was a great deal of doubt but we have managed to overcome all difficulties."
PM Modi said GST would reduce the risk of spoiling perishable goods by doing away with entry tax. He also added that the tax would unify the country economically.
"Because of myriad taxes, same commodity is available at different prices in different states but this confusion will be dealt with by the introduction of GST. Because of entry tax, trucks had to wait for long hours and perishable goods were at greater risk of getting spoilt but all this will end because of GST," PM Modi said.
"Sardar Vallabhai Patel united the country politically by integrating all the princely states into the Indian Union and with the implementation of GST, the country is being unified once again economically," PM Modi said.
The Prime Minister called GST a "good and simple tax" which will end harassment of traders and small businesses while integrating India into one market with one tax rate. He added that the tax reform will eliminate the compounding effects of multi-layered tax system.
A midnight gong marked the formal launch of the historic tax reform. Many Opposition parties including the Congress are boycotting the Midnight Session, calling it a "publicity gimmick".
A short film over India's biggest tax reform was also played at the event.
In his address to Parliament, Finance Minister Jaitley said GST was being brought in at a time that the world was witnessing slow growth and divisiveness. "It shows India can collectively think and act with maturity for broader purpose," the finance minister said.
Old India was economically fragment, but new India will be of one country, one tax. It will be a India where centre and states will work with common goal of shared prosperity. The consensus in getting to GST shows that India can collectively think, and act maturely," he said.
The finance minister said neither the centre nor the states had given away their sovereignty while enacting GST.
The GST will replace more than a dozen union and state levies and is expected to make doing business easier by simplifying the tax structure and ensuring greater compliance.
Watch PM Modi's speech:
The Goods and Services Tax or GST is scheduled to be launched on the 1st of July, and it is set to revolutionize the way we do our taxes. Catch the latest update on GST only on WION (WION)