Prime Minister Narendra Modi has announced big changes to India’s Goods and Services Tax (GST), promising a simpler tax system that will lower the burden on businesses and consumers. Speaking on the 79th Independence Day, Modi said these reforms will be rolled out by Diwali and will especially help small industries.
Soon after the announcement, the Finance Ministry sent a detailed proposal to the Group of Ministers (GoM) set up by the GST Council. The plan is built on three main ideas:
Structural changes to make GST easier to understand and follow.
Rate rationalisation – reducing the number of tax slabs.
Ease of living – making compliance less of a headache for people and businesses.
Right now, GST has four slabs – 5%, 12%, 18%, and 28%. The government wants to bring this down to just two main slabs – a standard rate and a lower merit rate – along with special rates for certain items. Officials say this will cut confusion and make the system more transparent.
The GST Council, chaired by Finance Minister Nirmala Sitharaman, will meet in September to discuss and finalise these changes. If approved, this will be the biggest reform since GST was introduced in July 2017.
