India Tax Overhaul
"Now, [the Modi government] is instituting the country’s biggest tax overhaul since independence. On Saturday, a nationwide sales tax replaces the current hodgepodge of business taxes that vary from state to state and are seen as an impediment to growth. It is expected to unify in a single market 1.3 billion people spread over 29 states and seven union territories in India’s $2 trillion economy."
The new tax system, the Goods & Services Tax (GST) is intended to simplify business taxes and spur growth, replacing taxes levied on businesses by the central government as well as the individual states. The GST will be divided in to Central Goods & Services Tax, State Goods & Services Tax and Integrated Goods & Services Tax. A constitutional amendment has already been passed by Parliament and approvals have been ascertained by India's 29 states. The current rate schedule includes 5, 12, 18 and 28% and a host of exceptions, subsuming dozens of brackets in to four.
Ahead of the roll out, the Indian government developed a technology portal, the GST Network, which is intended to allow business owners to register their companies and pay their taxes online. While the system and the portal is not without its detractors, it does appear to have had at least some positive economic effect. Hyundai and Nissan have announced a decrease in automobile prices to pass on savings under the GST -- 5.9% and 3%, respectively.
Update 2:43PM: There is a video session in which the Revenue Secretary, Ministry of Finance, Government of India answers questions regarding the GST roll out.