With backing from states, India moves closer to single customs union
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Vendors and customers crowd at a wholesale vegetable and fruit market in New Delhi July 2, 2014. REUTERS/Anindito Mukherjee/File Photo
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NEW DELHI (Reuters) - India moved a step closer on Thursday towards becoming a single customs union after a constitutional amendment secured the approval of half of its state legislatures.
The amendment for a uniform goods and services tax (GST) was passed by the Indian parliament last month.
The GST is the most significant revamp of the tax system since India's independence in 1947. It will subsume a slew of federal and state levies, transforming the country into one of the world's largest single markets and bumping up economic growth.
After the state of Odisha ratified the amendment on Thursday, Finance Minister Arun Jaitley took to Twitter, declaring the measure had won the requisite support from states and would now go for presidential assent. The measure required ratification by at least 16 state legislatures.
New Delhi is aiming to roll out the new sales tax from next April. But the legislative marathon doesn't end with the approval of the constitutional amendment. Both the federal and state legislatures must pass three laws setting the rate and scope of the GST before the tax comes into effect.
(Reporting by Rajesh Kumar Singh; Editing by Mark Trevelyan)
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