GST to be launched on July 1, says Finance Minister Arun Jaitley but warns of 'short term challenges'

Finance Minister Arun Jaitley on Tuesday said that the Goods and Services Tax (GST) will be launched from midnight of June 30-July 1.

​GST launch function will be held at the historic Central Hall of Parliament. "MPs, CMs and state Finance Ministers being invited for the function," said Jaitley.

Prime Minister Narendra Modi will be the key speaker at the function where President Pranab Mukherjee, Vice-President, Lok Sabha Speaker and former PMs Manmohan Singh and HD Deve Gowda will be on dais for GST launch.

"Over medium to long term, revenues of Centre, states will grow. In short term, there will be some challenges in switchover to GST," said Jaitley.

Taking a potshot at Opposition, Jaitley said, "We had been saying GST will be rolled out by July 1, nobody had any business not to be ready."

GST will simplify a web of taxes, regulations and border levies by subsuming an array of central and state levies including excise duty, service tax and VAT.

It will gradually re-shape India's business landscape, making the world's fastest-growing major economy an easier place to do business.

GST has been dubbed as the most significant economic reform since BJP government came to power in 2014 and is expected to add as much as 2 percentage points to the GDP growth rate besides raising government revenues by widening the tax net.

A four-rate structure that exempts or imposes a low rate of tax of 5 per cent on essential items and top rate of 28 per cent on cars and consumer durables has been finalised. The other slabs of tax are 12 and 18 per cent.