In a significant move for India’s economy, Prime Minister Narendra Modi has announced major reforms to the Goods and Services Tax (GST). This decision, which has been widely praised by industry leaders and economists, aims to simplify the tax structure and boost economic growth.
The proposed changes are a response to eight years of experience with the GST system. The government plans to eliminate the current 12% and 28% tax slabs, leaving just two main rates: 5% and 18%.
This rationalization is set to benefit both consumers and businesses. Sources indicate that 99% of items currently taxed at 12% will move to the 5% slab, and 90% of items at 28% will shift to the 18% slab.
According to industry experts, these reforms will put more money in the hands of consumers, stimulating demand and providing a significant boost to sectors like electronics and mobile phones. The move is also expected to greatly benefit small traders, MSMEs, and the retail sector, especially ahead of the upcoming festive season.
These reforms, anticipated to take effect by October, are seen as a crucial step toward achieving the “Viksit Bharat @ 2047” vision, making the tax system more efficient and business-friendly.