New Delhi: Addressing the nation on the 79th Independence Day celebrations on Friday, Prime Minister Narendra Modi said that the upcoming GST reforms will bring rate rationalisation and relief to farmers, the middle class and MSMEs.
“The Central Government is proposing major reforms in GST to build an ‘Atmanirbhar Bharat’ by focussing on structural reforms, rate rationalisation, and ease of living,” PM Modi said.
Reforms also aim to reduce classification disputes, correct inverted duty structures in specific sectors, ensure greater rate stability, and improve ease of doing business, an official release said.
Correction of inverted duty structures aims to align input and output tax rates, reducing the accumulation of input tax credit. This will enhance domestic value addition.
Further, the government plans to address classification issues to streamline rate structures, minimise disputes, simplify compliance processes, and ensure greater equity and consistency across sectors. Long-term clarity on rates and policy direction will enhance industry confidence and improve business planning, the release said.
The government also plans to reduce taxes on staple-use items and aspirational goods to increase affordability, boost consumption, and make these products more accessible to a larger population.
The rate rationalisation will reduce slabs to two: A standard tax rate and a merit-based rate. Special rates will be imposed on select items only.
The end of compensation cess has created fiscal space, providing greater flexibility to rationalise and align tax rates within the GST framework for long-term sustainability, the release said.
GST registration will be made seamless, technology-driven, and time-bound, particularly for small businesses and startups.
“Implement pre-filled returns to reduce manual intervention and eliminate mismatches. Refunds will be processed faster, and automated processing of refunds will be done for exporters and those with an inverted duty structure,” the release said.
The Central Government has sent its proposal on GST rate rationalisation and reforms to the Group of Ministers (GoM) constituted by the GST Council.
(IANS)
