One of India’s most ambitious economic reform plans in 70 years will ultimately boost tax receipts and provide simplicity for businesses, but the true impact may not be felt for at least a decade due to implementation challenges, experts said.
After several rounds of deadlock in the parliament, India rolled out the Goods and Services Tax (GST) on July 1, replacing a thicket of indirect central and state levies that critics argue have blunted economic competitiveness and hobbled efforts to lift more out of poverty.
Observers have described the reform as the most meaningful change to India’s tax regime since the country became independent in 1947.
The government will introduce GST for a variety of goods and services along four main rate bands: 5-, 12-, 18- and 28 percent irrespective of the location of purchase. Certain goods such as fresh meat, eggs, milk, among others, will not be taxed, according to a list compiled by the Economic Times newspaper.