India Acclimatizes Its Greater Tax Reform Amongst Protests

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Fruit sellers at their market stall in Bangalore, India. EFE.

The biggest tax reform in Indian history came into force today amidst protests from traders and opposition critics as traders and traders begin to adjust their prices to the new tax.

India lay down last night with a common indirect tax for its 29 states and 7 union territories, which went into effect at midnight, and dawned with thousands of closed shops in the only region that has yet to approve the structure for its implementation , The northern Kashmir.

While the Kashmir government expects to conclude an agreement with New Delhi this week, traders in the region remain stalled against the Goods and Services Tax (GST), as they showed today by massing a strike convened by the Federation of Merchants and Kashmir Manufacturers (KTMF).

Ahmad Bhat, vice president of the organization, told Efe that virtually “one hundred percent” of businesses, factories and restaurants closed their doors against a measure that, they believe, will affect the “special status” of autonomy that the This status.

In addition, the organization denounces that “now this tax will go directly to Delhi” instead of the Kashmir ark and the merchants will have to pay taxes of up to 28%, compared to the maximum 13.5% they were paying.

The GST, mandatory for companies with a turnover in excess of $ 30,000, replaces 17 state and central taxes that are reduced to one with five tranches of between zero and 28% depending on the type of product and service in question .

“The state economy of Jammu and Kashmir will fall because of the implementation of the GST,” said Bhat.

In the rest of the country, establishments have begun to adapt their prices to the new system and many restaurants have already replaced in their accounts the typical tax of two taxes only, one dictated by New Delhi and another by the regional government .

Tax offices and government departments across the country today celebrated with all kinds of acts the entry into force of a single tax that will affect 1,200 articles and about 500 services, boasting of a “historic” reform.

Indian Prime Minister Narendra Modi said last night during the GST launch that the new system will help end black money and corruption, benefit the poorest and facilitate economic integration of states.

The Government intends to kill several birds with one shot with the GST: on the one hand the digitization of the system, in which it does not interact physically with any official, will allow to fight against the abuse and the corruption.

On the other hand, the credit benefit in the payment to suppliers will encourage informal sector actors to legalize, so that, although the transit seeks to be neutral in terms of collection, everyone assumes that tax revenues will increase by Increase in the tax base.

However, the main opposition party, the Congress Party, of the Nehru-Gandhi dynasty, continues today with its campaign of discrediting the reform after boycotting last night the special parliamentary session with which it was marked its start.

Congressional leader and finance minister P. Chidambaram said at a press conference in his office in Tamil Nadu (south) that the maximum taxes should not exceed 18%, compared to 28% implemented, and warned that the new system will provoke An increase in inflation.

In addition, maintained, will be a “big” blow to SMEs, who are not prepared to adapt to reform.

This was also one of the main reasons why the Indian Industry Trade Association (BUVM), with 17,000 affiliated associations and SMEs, launched a commercial strike nationwide.

Other trade and industry associations have called strikes against the GST in different parts of the country for the next few days.

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