After years of deliberation and filibustering, India has finally ushered in a new tax regime with the introduction of the Goods and Services Tax (GST) aimed at realising the goal of “One Nation, One Tax, One Market.” Touted as the most sweeping economic reform since Independence, GST subsumes a plethora of central and state levies and bring the country under a common market while ensuring better compliance. While addressing a special ceremony in the Central Hall of Parliament during a midnight session, Prime Minister Narendra Modi described GST as a “Good and Simple Tax” that will bring about economic and social reform as well as unify the nation. He also said it will keep a check on corruption and end harassment at hands of officers.
Here’s how international media covered and reacted to the launch of GST in India
The British-daily said India has replaced its “numerous federal and state taxes with the GST” with an aim to unify the country into a single market. However, it said businesses have been asking for more time to implement changes as they are worried of being not ready for a switch to the new system. BBC also quoted Harishankar Subramanian of Ernst and Young as saying, “No country of comparable size and complexity has attempted a tax reform of this scale.” It said the price of most goods and services are expected to increase in the immediate aftermath of GST.
New York Times
According to the American daily, the Modi-led government is putting India “through a revolution in the way the country does business” for the second time in less than a year. It described the GST as the country’s biggest tax overhaul launched months after abruptly banning most of the country’s currency notes in a bid to stem corruption. The NYT article, ‘After Killing Currency, Modi Takes a Leap With India’s Biggest-Ever Tax Overhaul’, points out that India under the leadership of Modi has begun to lag in recent years and that he has been increasingly criticised by the opposition for falling short of election promises of recharging the economy. With the GST, the article says, the government is hoping not just to “streamline the myriad levies on businesses but to quiet the critics who say Mr. Modi has failed to deliver on his policy promises.”
Reflecting on India’s landmark decision, the UAE-based newspaper said, “Never has a nation waited with greater anticipation for the rollout of a Goods & Services Tax or GST (or any tax for that matter) as India has.” The article, “India unites under GST, but this is just the beginning”, points out that India languished under central planning and socialism for over forty years and, therefore, India had to resort to a plethora of indirect taxes on goods and services to make up the revenue shortfall. The daily further said, “Regardless of what happens in the future with GST, it is undoubtedly a step in the right direction.” The integration of the Indian economy into a single entity, which is the biggest benefit of GST, will improve economic efficiency. Supply chains have been fragmented with undue importance being afforded to
The integration of the Indian economy into a single entity will improve economic efficiency, it said. However, it added that “India needs a host of further reforms before it can even begin to climb up the ladder of prosperity and if this government simply rests on its laurels, thinking that enough has been done “for now” – a favourite Indian government refrain – then it will continue to be business as usual in India – much promised, little delivered.”
The Chinese daily lauded Prime Minister Narendra Modi’s determination in initiating a complete overhaul of country’s tax system. “The Modi government has been radical in pursuing financial reforms, and whatever the result is, the reformers’ determination is still laudable given the size and diversity of the country,” said the newspaper. It believes that the new tax policy on gold would improve the transparency and efficiency of gold supply in India.
“Some experts believe that as gold has been a big expense in India’s import bill, the GST and the gold exchange are aimed at bringing the gold market and gold from households into the formal banking system, thus monetizing about 20,000 tons of gold stored at home,” it observed while adding that the desired results would depend on how the authorities implement the new policy and ensure compliance with it.
The article, “India’s gold sector overhaul under GST shows determination to pursue financial reform“, further said the Modi government has been aggressive in its efforts in “pushing forward with the reforms, as evidenced by its drastic demonetization action”.