Modi Compromise Puts India Closer to Simplifying Tax Regime
- Cabinet adjusted legislation that would clear way for a GST
- ‘It would dramatically increase efficiency in the country’
Pedestrians walk past jewelry and bullion stores in the Zaveri Bazaar in Mumbai, India, on Monday, May 2, 2016. Prime Minister Narendra Modi in March imposed a 1 percent excise duty on jewelry, prompting protests from thousands of manufacturers and artisans across India. Kumar Jain, owner of Umedmal Tilokchand (U.T) Zaveri jewelry store, says the extra burden is dealing a financial blow and will cost Modi the support of most of the country's roughly 3.5 million jewelers, designers and artisans.
Photographer: Dhiraj Singh/BloombergPrime Minister Narendra Modi’s cabinet met a key opposition demand on proposed legislation that would clear the way for a national sales tax, putting India closer to passing its most ambitious economic reform since the 1990s.
The cabinet decided late Wednesday to eliminate an additional 1 percent charge on inter-state sales that was included in a constitutional amendment bill to create a goods-and-services tax, known as GST. The opposition had argued that the additional levy would undermine the goal of creating a single market among India’s 1.3 billion people.