Next-Generation GST Reforms: Indians can anticipate a “Double Diwali” this year as Prime Minister Narendra Modi used his 79th Independence Day speech to lay forth a daring plan for economic expansion and reforms. Speaking atop the Red Fort’s historic ramparts, Modi outlined recent changes to the income tax code and pledged comprehensive next-generation GST reforms as a Diwali present to the Indian populace.

Double Diwali Gift by Modi:

Modi began by highlighting the importance of building an independent and powerful India. He urged the nation to commit to creating a “samarth” Bharat, just as the freedom fighters had envisioned a “free India.” He then shifted focus to economic measures, announcing that the government would implement significant GST reforms to benefit all citizens, particularly small enterprises and MSMEs, following the recent simplification of income tax laws.

“I will present a fantastic gift this Diwali,” Modi said. He noted that over the past eight years, the government had made significant changes to the GST, simplifying the tax system. He explained that the time had come for a review, which the government had conducted and discussed with the states. “We are implementing the next-generation GST reform,” Modi declared. He clarified that the reforms would significantly reduce taxes on common individual services, thereby lowering the cost of everyday goods and supporting small enterprises and the overall economy.

Three important GST Reforms:

The three primary pillars of the government’s proposed changes are rate rationalization, structural reforms, and ease of living. The GST Council’s Group of Ministers (GoM) has been tasked with reviewing these ideas.

1. Rate Rationalization:

Rate rationalization mainly focuses on creating a system that makes essential goods more affordable by reducing taxes. The administration aims to cut the number of slabs and develop a streamlined tax structure. The government now plans to maintain two main slabs and impose special rates on select commodities. By eliminating the compensatory process, the government enables the modification of rates within GST.

Also Read: UPI Changes from October 1: One Major Feature May Be Removed

2. Structural Reforms:

The government will design structural reforms to stabilize rates and policies. These reforms will also fix categorization problems and resolve inverted duty structures. Officials say these adjustments, along with reduced conflicts, streamlined compliance, and support for homegrown businesses, will provide significant benefits.

3. Simple Living Measures:

The system will simplify and expedite the registration process, tax filing, and refund processing. For exporters and certain industries, pre-filled returns and automated refunds will reduce manual labor and benefit startups and small enterprises. The Center will work with the States to reach an agreement on these measures. The GoM will review the proposals, and the GST Council will discuss them to enable early implementation and ensure the benefits reach individuals and businesses within the current fiscal year.

Share

• 
• 
• 
• 
• 
•