When Prime Minister Modi won his landslide election he promised that it would be easier to do business in India. PM Modi has been doing his best to keep his promise. Talk to anyone doing business in India now and they will tell you it's easier from setting up a new company to getting foreign direct investment consents. However, the biggest complaint was the multiple taxes payable for example if a company moved any goods between various states, the company would have to pay local taxes in each state and national taxes. The new Goods and Services Tax introduced in India means that this problem has now been solved with the introduction of this national tax and sweeping away the need to pay local taxes as goods moved from state to state. Although the new system will have teething problems as it is implemented over the coming weeks, the long term news is good for companies trading in India and the economy should get an immediate positive boost.
India has replaced its numerous federal and state taxes with the Goods and Services Tax (GST), designed to unify the country into a single market. The historic overhaul of the existing tax legislation was carried out at a special midnight session of parliament. India says introducing GST will cut red tape and increase tax revenues, fuelling economic growth.Finance Minister Arun Jaitley says the reform will help the economy grow by 2%.