New Delhi, Jun 30 (IANS): The central government on Saturday said that July 1 will be celebrated as the "GST Day" to commemorate the first year of the "unprecedented reform of Indian taxation" system.

The Goods and Services Tax (GST) was launched on July 1, 2017 in a ceremony held in the Central Hall of Parliament on the midnight of June 30, 2017.

"The first year has been remarkable both for the sheer variety of challenges that its implementation has thrown up and for the willingness and ability of policy makers and tax administrators to rise up to these challenges and respond befittingly," the Ministry of Finance was said in a statement on Saturday.

"But more importantly, the first year of GST has been an example to the world of the readiness of the Indian taxpayer to be a partner in this unprecedented reform of Indian taxation."

Prior to its implementation the Indian taxation system was a farrago of central, state and local area levies.

"In the constitutional scheme, taxation power on goods was with central government but it was limited up to the stage of manufacture and production while States had power to tax sale and purchase of goods. Centre had the exclusive power to tax services," the statement said.

"This sort of division of taxing powers created a grey zone which led to legal disputes since determination of what constitutes a goods or service became increasingly difficult."

As per the statement, the introduction of GST is "truly a game changer for Indian economy as it has replaced multi-layered, complex indirect tax structure with a simple, transparent and technology-driven tax regime".

"It will integrate India into a single, common market by breaking barriers to inter- State trade and commerce. By eliminating cascading of taxes and reducing transaction costs, it will enhance ease of doing business in the country and provide an impetus to 'Make in India' campaign. GST will result in ‘One Nation, One Tax, One Market'," the statement added.