Bengaluru, Sep 4 Prime Minister Narendra Modi-led Central government has introduced revolutionary changes to the Goods and Services Tax (GST) system, which is a historic Diwali gift to the nation, said Union Minister H.D. Kumaraswamy.
In a press statement on Thursday, the Minister said the Union Cabinet meeting chaired by Prime Minister Narendra Modi had approved next-generation GST reforms.
Kumaraswamy described it as a transformational step that would make people’s lives easier and strengthen the vision of 'Aatmanirbhar Bharat'.
With the new reforms, GST will now have only two slabs -- 5 per cent and 18 per cent. Essential commodities, healthcare, education, agriculture, and automobiles will become more affordable. At the same time, businesses and small and medium-scale industries (MSMEs) will receive a major boost, he added with satisfaction.
Kumaraswamy further stated that the reform simplifies the system, makes it more accessible, and represents a truly people-centric measure that will bring happiness to households across India.
Under the new GST structure, only two primary slabs will remain -- 5 per cent and 18 per cent -- along with a higher 40 per cent rate for sin goods. Officials said the revised structure will leave more disposable income in the hands of the common man, which the government expects will cycle back into the economy and spur growth. The rates will come into effect from September 22
Several items, including groceries, footwear, textiles, fertilisers and renewable energy products, will now become cheaper.
Goods earlier taxed at 12 per cent and 28 per cent will largely shift into the two main slabs, easing the burden on households.
This move will help put more money back in the hands of the middle class, who are the actual biggest spenders, thereby boosting domestic consumption.
"The wide-ranging reforms will benefit... the common man, farmers, MSMEs, middle-class, women and youth," PM Modi said in his post on X soon after the Union Finance Minister made the announcements.
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