Indian lawmakers on Wednesday passed the Goods and Services Tax (GST) bill, setting the stage for the country to replace a bevy of federal and state sales taxes with a single nationwide levy.
Following the key legislative victory for the Narendra Modi government, the world’s fastest growing major economy is a step closer to meeting a target for a rollout of the GST from July 1.
The GST bill along with some supplementary legislations were approved by members of the Lok Sabha, the parliament’s lower house.
“These are revolutionary bills which will benefit all,” Finance Minister Arun Jaitley said during a nine-hour debate in Parliament leading up to Wednesday evening’s vote, the Wall Street Journal reports.
Local and international firms have long complained about the maze of red tape and levies that gets in the way of doing business in India. Each of India’s states has its own regime for taxing goods.
The central government taxes services and manufactured products. Another levy applies when goods cross state lines.
But now those levies will make way for a single nationwide GST.
Modi’s team has hailed the tax overhaul as India’s biggest since it gained independence from Britain in 1947.
The GST is expected to deal a blow to the underground economy by bringing more small businesses into the tax net.
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