Government that launched GST is back

New Delhi: Bucking trends overseas, where governments lost elections after launching the Goods and Services Tax (GST), India appears to have voted overwhelmingly for the ruling party, suggesting that the new indirect tax regime has been widely accepted as a major economic reform.

Federal governments had lost the elections in Malaysia, New Zealand and Australia following the launch of the GST there.

The popular anger in these countries was primarily due to the resulting high prices of goods and services after the tax reform.

"This is possibly the first time that a large country has re-elected a government which introduced GST," said a leading tax law expert here who did not wish to be named because the issue involves politics.

Listing out the reasons for the thumping majority projected for the government which brought in the structural tax reform, the expert said that Prime Minister Narendra Modi's government had managed to keep inflationary pressure in check and had responded proactively to the demands of industry.

"In many countries where GST was launched, the governments promised that whatever difficulties faced on this count would be resolved within a year, while the time difference between elections and GST roll-out was less than a year," another top GST consultant said.