India has replaced its numerous federal and state taxes with the Goods and Services Tax (GST), designed to unify the country into a single market, BBC reports.
The historic overhaul of the existing tax legislation was carried out at a special midnight session of parliament.
India says introducing GST will cut red tape and increase tax revenues, fuelling economic growth.
Indian Finance Minister Arun Jaitley says the reform will help the economy grow by 2%.
But businesses have been asking for more time to implement changes, worried that they are not ready for the move to the new system.
Many do not even have a computer to register on the GST network.