India’s president and the prime minister pressed a button heralding the major overhaul of the taxation system – known as the single Goods and Services Tax – from July 1.

Prime Minister Narendra Modi said in a speech that the new system would eliminate 500 types of taxes in favor of one tax across the country, a catalyst that would remove trade imbalance and promote exports.

“GST is a simple, transparent system which prevents generation of blackmoney and curbs corruption. The system gives opportunity to honesty and people who do honest business,” he said.

The main opposition Congress and some other parties boycotted the midnight ceremony, arguing that nearly 7 million traders needed more time to prepare for the new system as they would be required to file tax returns every month. The opposition, however, supported the new tax system.

India’s Chief Economic Adviser Arvind Subramanian was confident of resolving teething problems of the implementation in a month or two.
“There will be some hurdles initially. But we will be able to remove them in 1-2 months,” Subramanian told reporters.

The government published lists last month showing almost every item for sale in India, from shampoo to tea to automobiles, should be taxed within four broad categories — at rates of 5 percent, 12 percent, 18 percent or 28 percent. It had already ordered all businesses in January to adopt or upgrade cash registers and computer systems so they are able to file taxreturns that comply with the new tax regime.

Most of India’s 29 states have passed local laws to implement the new tax regime, but some have pleaded for more time.