PM Modi Announces Next-Gen GST Reforms On Independence Day

On the occasion of India’s 79th Independence Day, Prime Minister Narendra Modi highlighted the transformative role of the Goods and Services Tax (GST), calling it one of the most significant economic reforms since its implementation in 2017. He said the next phase of GST reforms will be crucial in building an ‘Atmanirbhar Bharat’ by easing the tax burden, strengthening industry and improving ease of living.

The Centre has proposed a comprehensive reform package built on three pillars – structural reforms, rate rationalisation and ease of living. These proposals have been shared with the Group of Ministers (GoM) constituted by the GST Council for further deliberation.

Key Focus Areas of the Reform:

• Structural Reforms: Correction of inverted duty structures, resolution of classification disputes and greater rate stability to provide long-term clarity for businesses.
• Rate Rationalisation: Reduction of tax rates on essential and aspirational goods, moving towards a simplified two-slab structure and leveraging the fiscal space created by the end of compensation cess.
• Ease of Living: Simplified registration, pre-filled GST returns and faster automated refunds, especially for exporters and businesses impacted by inverted duty structures.

The government emphasised that these reforms will reduce disputes, boost consumption, enhance affordability and ensure fairness across sectors, ultimately stimulating economic activity and enabling sectoral growth.

Reaffirming the spirit of cooperative federalism, the Centre stated it will work closely with states to build consensus and ensure timely implementation. The GST Council is expected to deliberate on the GoM’s recommendations in its upcoming meeting, with the aim of rolling out reforms within the current financial year.

“The Government is committed to evolving GST into a simple, stable and transparent tax system, one that strengthens the formal economy, enhances ease of doing business, and ensures inclusive growth,” the statement said.