GST Reforms: PM Narendra Modi announced GST Reform 2025 in Independence Day Speech. 3-Pillar Next-Generation GST reforms will be implemented before Diwali, which will make common-use items cheap, MSMES and general public will get big benefits.
GST Reform 2025: This year, there are going to be major changes in the Goods and Services Tax i.e. GST (GST) system in the country. On Independence Day, Prime Minister Narendra Modi promised the Red Fort that Next Generation GST reforms would be implemented before Deepawali. This will reduce tax on common-use items. The Central Government has prepared a three-3-pillar blueprint for these reforms and sent to the Group of Ministers (GOM), which GST Council will take for discussion in its next meeting.
‘Double Diwali’ promise
In his speech on his Independence Day, PM Modi described GST reforms as Diwali gift and said that this will reduce the tax burden across the country. He reminded that GST came into force on 1 July 2017 and now after eight years its time has come for its review. For this, High-Powered Committee was created and a new reform package was prepared after consulting the states.
3-Pillar GST Reform blueprint
- Structural reforms – Inverted duty structure correction, solution of classification issues and tax stability. Inverted duty correction means to establish a balance between taxes on raw materials and taxes on prepared goods.
- Rate rationalization -Reduce tax rates on the common man’s useful and common-use items, reduce tax slab and bring stability in rate. It is believed that the prices of everyday essential goods of the common man will be controlled and prices can be reduced.
- Make life easier – Easy registration for startups, east filled returns and fast returns process.
What will be the benefit to the general public?
According to the Finance Ministry, structural reforms will balance input and output tax rates, which can make household goods cheaper. Solving classification issues will reduce the disputes and the process will be easier. Rate rationalization will make everyday items etc. cheap, consumption will increase and the economy will get boost. The government is working towards two main slabs – Standard and Merit – while special rates will be limited to some select items.
Focus on Ease of Doing Business
Reforms will make the registration process of small businesses and startups easier. Pre-Filled Returns will end manual errors and misses. Industries with exporters and inverted duty structure will get automatically fast refunds.