GST Reforms to Benefit Citizens and Businesses, PM Modi Announces
Prime Minister Narendra Modi has announced that the GST Council has unanimously approved “next-generation” reforms aimed at simplifying the tax structure and reducing rates on a wide range of goods and services. The changes, which were proposed by the Union Government and will take effect from September 22, are expected to benefit the common man, farmers, MSMEs, and youth by making essential items more affordable and improving the ease of doing business.
Key Highlights of the Reforms:
- Tax Slab Rationalization: The existing four-tier GST structure (5%, 12%, 18%, and 28%) has been simplified into a two-rate system of 5% and 18%. A new 40% rate has been created for “sin” and luxury goods.
- Lower Taxes on Essentials: A broad list of everyday items will see a significant reduction in their tax burden. This includes personal care products like hair oil, shampoo, and toothpaste, which will now be taxed at 5% instead of 18%. Packaged foods, dairy products, and certain household goods will also become cheaper.
- Relief for Key Sectors: The reforms offer specific relief for the agriculture, healthcare, and textile sectors. GST on life and health insurance premiums will be eliminated, while rates on agricultural machinery, fertilizers, and medical equipment will be reduced.
- Ease of Doing Business: The government has also introduced process reforms to simplify compliance for small traders and businesses, including automated refunds, return filing, and registration.
In a post on X, PM Modi expressed his satisfaction with the collective agreement of the GST Council, recalling his Independence Day promise to bring these reforms. He stated that the wide-ranging changes will improve the lives of citizens and strengthen the economy.