The reforms represent the most significant overhaul of India’s consumption tax since GST’s 2017 launch.
The Goods and Services Tax (GST) reforms that came into effect on Monday will boost savings and directly benefit every section of society, Prime Minister Narendra Modi said in a letter to citizens, pointing out that the new taxation slabs will encourage greater growth and investments and help in meeting the goal of developed India by 2047.
The reforms represent the most significant overhaul of India’s consumption tax since GST’s 2017 launch, streamlining the structure from four slabs to essentially two rates of 5% and 18%. The government has said 99% of the goods that earlier attracted 12% GST have now been shifted to 5%.
“Our collective goal is Viksit Bharat by 2047. To achieve it, walking on the path of self-reliance is imperative. These reforms strengthen our local manufacturing base, paving the way towards Aatmanirbhar Bharat,” he said in the letter.
“This year, the festive season brings an added reason to rejoice. These reforms will boost savings and directly benefit every section of society, be it farmers, women, youth, poor, middle class, traders or MSMEs. They will encourage greater growth and investments and accelerate the progress of every state and region,” the PM added.
Modi also travelled to Arunachal Pradesh and Tripura on Monday. In the former, he interacted with local entrepreneurs and members of self-help groups, and urged them to buy and sell only “swadeshi” products.
Modi said that despite facing major challenges over the years, his government consistently reduced income tax rates. “GST has now been simplified to just two slabs. Many items have become tax-free. Building a home, purchasing a scooter or bike, dining out, and travelling have all become more affordable. GST Savings Festival is a milestone,” he said.
In his address to the nation on Sunday, the PM had said Indians will save ₹2.5 lakh crore on account of the GST reform and the income tax changes announced earlier this year.
