The ministry of finance has released details on the proposed GST reforms, saying that a two-slab GST structure is being mulled. (AI image)
Big GST relief soon! Prime Minister Narendra Modi in his Independence Day speech announced that the Goods and Services Tax (GST) burden on the common man is set to come down from this Diwali with next-generation reforms slated to be rolled out. PM Modi stressed the need for the next phase of GST reforms, which aim to provide relief to ordinary citizens, farmers, the middle class, and small and medium enterprises (MSMEs).The ministry of finance has released details on the proposed GST reforms, saying that a two-slab GST structure is being mulled – standard and merit – and special rates on select items. The new GST structure will replace the current 5%, 12%, 18%, 28% slabs. A GST Council meeting is expected next month.Also Read | PM Modi promises big Diwali gift! GST reforms to lower tax burden for common man soon; here’s what he said in Independence Day speechOn the 79th Independence Day, Prime Minister Narendra Modi emphasized the significance of the Goods and Services Tax (GST), introduced in 2017, as a major reform that has positively impacted the country.
GST reforms: New slab rates & more – top points to know
To achieve a self-reliant India, the Central Government is planning major GST reforms based on three main pillars:1. Structural reforms2. Rate rationalization3. Ease of livingThe government has submitted its GST rate rationalization and reform proposals to the Group of Ministers (GoM) formed by the GST Council for review. The focus of the next-generation reforms includes adjusting tax rates to benefit all societal segments, particularly the common man, women, students, the middle class, and farmers.The reforms aim to reduce classification disputes, correct inverted duty structures in certain sectors, ensure rate stability, and improve the ease of doing business. These efforts are expected to strengthen key economic sectors, boost economic activity, and promote sectoral growth. Key Pillars of the Proposed GST Reforms:1. Structural Reforms: – Correcting inverted duty structures to align input and output tax rates, reducing input tax credit accumulation, and supporting domestic value addition. – Resolving classification issues to streamline rate structures, minimize disputes, simplify compliance, and ensure equity and consistency across sectors. – Providing long-term clarity on rates and policy direction to build industry confidence and support better business planning.2. Rate Rationalization: – Reducing taxes on essential and aspirational goods to enhance affordability, boost consumption, and make these goods more accessible. – Moving towards a simpler tax system with two slabs—standard and merit—with special rates for select items. – The end of compensation cess has created fiscal space, allowing for greater flexibility in rationalizing and aligning tax rates within the GST framework for sustainability.3. Ease of Living: – Implementing seamless, technology-driven, and time-bound registration, especially for small businesses and startups. – Introducing pre-filled returns to reduce manual intervention and eliminate mismatches. – Ensuring faster and automated processing of refunds for exporters and those with inverted duty structures.The Centre’s proposal, based on these three pillars, has been shared with the GoM for further discussion. The initiative aims to foster a constructive, inclusive, and consensus-based dialogue among all stakeholders.The GST Council will consider the GoM’s recommendations in its next meeting, with efforts to facilitate early implementation so that the benefits are realized within the current financial year, the ministry of finance said. Go to Source
