India GST implementation delay to 2017

Fri 11th Sep 2015

The Indian ruling Modi government has now effectively withdrawn the legislation to overhaul the existing, antiquated Indian VAT system with a new Goods & Services Tax (GST). This means that the planned April 2016 implementation date will likely be missed, and may not be introduced until 2017 or even later.

The GST reforms had hit Congress opposition in the past month, and the BJP government finally decided to end the current Monsoon session of parliament this week. This means the enacting legislation cannot gain final approval. The next parliamentary session will be in November, which is likely to be too late for a 2016 implementation.

Indian GST reform

The long-anticipated reform of the VAT, CENVAT, Service Tax and other overlapping consumption taxes sold as being able to deliver 1-2% growth in GDP. It would eliminate double taxation on inter-state movement of goods, thus promoting manufacturing, and lift the burden on reporting on multiple taxes and rates.

The implementation of GST was viewed as a major plank in the reformist Modi governments’ landslide election win in 2014.