GST launched: Mixed reaction to new tax regime as celebrations and protests emerge across India

[caption id="attachment_3764793" align="alignnone" width="940"] Bharatiya Janata Party (BJP) workers celebrate the implementation of the Goods and Services Tax (GST), India's biggest taxation reform since Independence, which came into force on Friday after 17 tumultuous years of debate, unifying more than a dozen central and state levies. AP[/caption][caption id="attachment_3765185" align="alignnone" width="940"] While there were celebrations across the nation, they were also interspersed with just as many protests. People burn an effigy during a protest against GST in Birbhum district of West Bengal. PTI[/caption][caption id="attachment_3765211" align="alignnone" width="940"] BJP members burst firecrackers to welcome GST in Jaipur. Under GST, the country's $2 trillion economy and 1.3 billion people will be unified into a common market. PTI[/caption][caption id="attachment_3765221" align="alignnone" width="940"] While the measure is being billed as making doing business easier by simplifying the tax structure and ensuring greater compliance, businesses, particularly small traders, are nervous about the new tax filing system. Indian textile traders hold placards as they walk past closed shops during a protest against the implementation of the nationwide GST in Bangalore. AP[/caption][caption id="attachment_3765243" align="alignnone" width="940"] Terming the GST a "good and simple tax", Prime Minister Narendra Modi said it will put an end to harassment of honest traders and small businesses while integrating the country into one market with one tax. AP[/caption][caption id="attachment_3765251" align="alignnone" width="940"] However, Modi's sentiment wasn't matched by the Opposition, with Congress, Trinamool Congress, Left parties, DMK, NC, RJD, and other parties boycotting the midnight launch and dubbing it as a "tamasha". Aam Aadmi Party (AAP) activists shouted slogans against Finance Minister Arun Jaitley during a protest against GST in Patna. PTI[/caption][caption id="attachment_3765271" align="alignnone" width="940"] Despite the mixed reaction, GST is deemed to transform India's economy. The regime aims to eliminate the compounding effect of the current multi-layered tax system as well as cross-state tax heterogeneity by fixing the final tax rate. It is expected to lower the average tax rate on manufactured goods and make them uniform across states by fixing the final tax rate. PTI[/caption]