Though experts agree on the long-term benefits, including the ease of doing business in India and bringing swathes of the country's informal economy inside the tax net, they say in the near term there could be significant disruptions. These people were opposed to such economic integration.
"(The) GST paves the way for the "One Nation, One Tax" ideology", said Devendra Kumar Vyas, chief executive officer at Srei Equipment Finance Ltd.
President Pranab Mukherjee said the new indirect tax system was a "disruptive change", and any initial problems in its implementation would be overcome. "GST is a simple, transparent system which prevents generation of black money and curbs corruption", said Modi, who jolted the country past year by withdrawing more than 85 percent of India's bank notes from circulation in a clampdown on under-the-table dealings. To everyone else including the poor, PM Modi pitched the GST as a tool to deliver value to the poor.
"We are setting India's roadmap with GST", Modi said. In a little while, the country will move in a new direction. The GST has been launched with an aim to unify India's $2 trillion economy and 1.3 billion people into a common market.
President Pranab Mukherjee signalled the formal launch by pressing a button.
Union Minister of State for Labour and Employment Bandaru Dattatreya today said the implementation of Goods and Services Tax (GST) will create one lakh jobs in the next three months. This path we have chosen is not one party or one government's.
He went on to add, "It is not just a financial reform, but a social reform too". The first fallout was seen yesterday when the southern state of Tamil Nadu announced a 30 percent levy on movie tickets, in addition to the 28 percent GST fee.
"We are not selling right now... permission for manual billing has not been received yet", said Dinesh, manager, Baggit, a premium leather brand for bags. "It has pleasantly surprised everybody by completing its task on time", the President said. With higher input tax credit, prices of most goods may reduce, but services, a lot of them taxed at 18 per cent, could become more expensive.
Hours before the midnight launch, the GST Council, the highest decision making body that formulated the rules and tax rates, met for the eighteenth time.