Centre urges Congress to rethink stand on GST launch, Nitish too will skip event

The GST in its present format is “unacceptable” to the Congress as it will “ruin” small businesses and create “unemployment”, senior party leader Ajay Maken has said.

Union minister M Venkaiah Naidu said on Friday it was unfortunate that the Congress was distancing itself from the GST launch event, hoping the opposition party will rethink their stand.

Textile traders shout slogans as they take part in a bike rally to protest against GST in Hyderabad on Thursday. (PTI)

Prime Minister Narendra Modi will unveil the new tax regime at midnight, replacing a messy mix of more than a dozen state and central levies that will unify the country’s $2 trillion economy and weave 1.3 billion people into a common market.

Opposition parties TMC, Congress and Left see undue haste in the implementation of the goods and services tax, causing hardships for millions of tiny neighbourhood shops that don’t even use a calculator. They have decided to boycott the gala event.

Current effective tax rate includes central excise duty, VAT and all various local levies. * This is the cess that will be applicable on cars

The Janata Dal-United (JD-U) will send a representative to the Parliament event. Earlier, Bihar CM Nistish Kumar was expected to attend. Lalu Prasad’s Rashtriya Janata Dal (RJD) -- like the Congress -- will not be present.

“It’s really unfortunate because they are distancing themselves from the process of reformation in the country. I hope they (Congress) realise by evening and re-think and join us in the Central Hall,” Naidu told at a programme organised by a TV channel.

“I still appeal to the Congress and other parties boycotting GST event to reconsider. It’s not a party function,” he added.

The government promises that the transition to a single, nationwide tax on goods and services will streamline business and boost the economy by tearing down barriers between 31 states and union territories. It is estimated to add 0.4% to 2% to GDP growth.

But some businesses are still figuring out how it will work as they race against time to adopt or upgrade cash registers and computer system so they are able to file monthly tax returns that comply with the new tax regime.

For some businesses, the GST is complex with four broad tax categories of 5, 12, 18 and 24%, and myriad exceptions, as opposed to a simpler, flatter and broader sales taxes in other countries.