INDIAN GST - WHAT, WHEN, WHY
More than 10 years after it was initially proposed, India has rolled out a Goods and Services Tax on July 1 2017 making it the single biggest tax reform since Indian independence in 1947. The GST will simplify a highly complex and layered tax system comprising of upto 17 indirect taxes levied by the centre (federal), state and local governments including excise, service tax, entertainment, entry, luxury and value-added taxes. While India is the world’s fastest growing major economy, it sits at 130th in the World Bank’s Ease of Doing Business ranks. The unifying sales tax is anticipated to increase the ease of doing business by creating a single market and considerably widen the tax base in a country where only 3% of the population pay income tax.
While India boasts a consumer population almost as large as China, and larger than the EU and North America combined, the cascade of taxes applied across 29 states have created a highly fragmented market with huge interstate trade inefficiencies.
