New Delhi [India], August 16 : Industry body Confederation of Indian Industry (CII) has welcomed the upcoming reforms in Goods and Services Tax (GST) as announced by Prime Minister Narendra Modi from the Red Fort during his Independence Day address to the nation.
"On behalf of Indian industry, the Confederation of Indian Industry (CII) warmly welcomes the Hon'ble Prime Minister's visionary announcement today of next-generation Goods and Services Tax (GST) reforms. This landmark step reflects the Government's deep commitment to building a simpler, more transparent, and growth-oriented tax regime that will empower businesses and benefit consumers alike," said Chandrajit Banerjee, Director General, CII.
The announcement of a high-powered committee to review and recommend comprehensive improvements in the GST framework is both timely and forward-looking. It acknowledges the need for a tax system that keeps pace with India's fast-evolving economy, while ensuring predictability and stability for investors, businesses, and entrepreneurs, said CII.
"We particularly commend the Government for incorporating many of the suggestions consistently advocated by CII and industry, such as: moving towards a two-rate structure (in the overall context of converged rates, besides the one for Demerit Goods) to simplify the tax system and eliminate ambiguities. Correcting inverted duty structures, which have hampered competitiveness in key manufacturing sectors. Reducing compliance burden for MSMEs, thereby enabling greater participation of small enterprises in the formal economy. Ensuring predictability and stability in tax rates will provide confidence to both domestic and global investors," CII DG said.
"These measures are expected to have a far-reaching positive impact on ease of doing business, reduce costs across value chains, and accelerate the process of formalisation and digitisation of the economy. Importantly, the emphasis on lowering tax rates for essential goods while rationalising higher rates for luxury and sin products reflects a balanced approach of equity and efficiency, benefiting both consumers and the exchequer," the CII DG said.
Since its introduction, GST has been a transformative reform, unifying the national market, reducing cascading of taxes, and creating a technology-driven compliance system. With today's announcements, India is poised to enter a GST 2.0 erastreamlined, globally benchmarked, and capable of supporting India's ambition to become a USD 5 trillion economy in the near future.
CII further added that it commends the Government for its inclusive and consultative approach, wherein the voices of industry and other stakeholders have been given due weightage in shaping this reform roadmap.
We stand ready to work closely with the Ministry of Finance, the GST Council, and other stakeholders to ensure the smooth implementation of these landmark reforms, said the CII statement.
"CII firmly believes that these measures will further strengthen India's economic foundations, enhance investor confidence, and position the country as one of the world's most competitive and resilient economies", the CII Director General concluded.
PM Modi, in his address to the nation, announced that the government will revisit the provisions of GST and reform the structure to ease the common man.
After PM's speech, government sources said that the Centre has proposed to scrap the current slab of 12 per cent and 28 per cent of GST rates and keep only 5 per cent and 18 per cent GST rates.
They further added that as part of the initiative, 99 per cent of the 12 per cent slab is proposed to move to the 5 per cent slab and 90 per cent of the items in the 28 per cent slab are proposed to move to the 18 per cent slab.
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