PM Modi on promised significant Goods and Services Tax (GST) reforms, calling them a “Diwali gift” for the nation that would ease the tax burden and simplify compliance for businesses and citizens.
During his Independence Day speech on Friday, Prime Minister Narendra Modi announced that new-generation GST reforms will be rolled out by Diwali. These changes aim to cut taxes on daily-use items, making them more affordable for people. Addressing the nation on 79th Independence Day, Modi said the time has come to undertake reforms in GST as the indirect tax regime has completed 8 years.
“By this Diwali, you will see a simpler GST system that will make life easier for the common man and strengthen our economy,” he said from the Red Fort. Modi explained that the new system will also improve transparency and make it easier for businesses to follow the rules.
He added that the reforms will greatly reduce the tax burden on citizens, help small industries and MSMEs, and bring down prices of essential goods. “The past decade was about reform, perform, and transform; now we must aim even higher,” he said.
A special task force will also be formed to suggest all necessary 21st-century reforms within a fixed time frame. India first introduced the Goods and Services Tax (GST) on July 1, 2017, replacing many central and state taxes with a single tax system. The GST Council, made up of central and state finance ministers, decides on rates, exemptions, and policy updates.
The current GST rates fall into five main slabs, from 0 per cent to 28 per cent, with 12 and 18 per cent serving as the standard rates for a wide range of goods and services. Around 21 per cent of all goods fall under the 5 per cent category, 19 per cent under the 12 per cent bracket, and 44 per cent under the 18 per cent slab.
