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Substantial tax relief for common man, big boost for MSMEs promised

New Delhi: Prime Minister Narendra Modi on Friday announced that next-generation reforms in the Goods and Services Tax (GST) will be implemented by Diwali this year, promising substantial tax relief to the common man and significant benefits for small and medium enterprises (MSMEs). Addressing the nation from the ramparts of the Red Fort on the occasion of India’s 79th Independence Day, Modi said the indirect tax system, which was rolled out on July 1, 2017, had now completed eight years and was ready for a major upgrade.“We have discussed with states and we will usher in next-generation GST reforms by Diwali, which will be a Diwali gift for citizens. Tax on items of daily use will be reduced substantially. Our MSMEs will benefit hugely. This will also strengthen our economy,” Modi said.

The Prime Minister underlined that the reforms will target rate rationalisation and the pruning of GST slabs to make the system simpler and more efficient.A Group of Ministers (GoM), comprising state finance ministers, is already working on recommendations to adjust GST rates and remove anomalies in the structure. The GST, which subsumed multiple central and state levies into a unified tax regime, is seen as one of India’s biggest economic reforms. The proposed changes are expected to make it more citizen-friendly and business-supportive, aligning it with the needs of a growing economy.