Next Generation GST

Prime Minister Narendra Modi had announced from the ramparts of the Red Fort on the Independence Day that Next-generation GST reforms will benefit the quality of life of the last citizen. As these reforms represent the strategic , principled and citizen-centric evolution of a landmark tax framework. Keeping this in view, the GST Council approves reforms with a multi-sectoral and multi- thematic focus on improving the lives of citizens of India with ease of doing business by taking into consideration small traders and businessmen. The council has approved the rate rationalization with the common man as the center of consideration. Not only that, rate rationalization has taken care of labor intensive industries, farmers and agriculture besides the health sector as the key drivers of the economy. The council has tried to make the insurance policies affordable by increasing the insurance coverage in the country as it allowed the exception of GST on individual life insurance policies. These policies include health insurance policies. There is a clear transition in terms of rationalization of the current 4 -tier tax rate structure into a citizen friendly simple tax- a 2 rate structure with a standard rate of 18% and a merit rate of 5 %,a special de-merit rate of 40 % for select goods and services. Relief for the common man is clearly visible as there is a reduction of GST from 18 % or 12% to 5 % on the items of daily use like toilet soaps, hair oil, shampoos, Toothpastes, bicycles etc. The council has tried to bring more items of common use in this ambit by relieving common man from the extra burden. These items include cheese, milk, bread and other hues of packaged items like namkeens, chocolates, coffee, preserved meat, butter, ghee, etc.It is indeed a good move to bring the agriculture sector in this ambit too by reducing the GST from 12% to 5 % on tractors, and other machinery related to horticulture or forestry besides the straw or fodder balers, grass or hay mowers, composting machines. There is a comprehensive GST reform to ease the burden of the common people. This can be seen from the reduction of GST from 12% to 5% on labor intensive goods like handicrafts and leather items. Care has been taken of the building industry by reducing the GST on cement from 28 to 18 % on cement. GST reduction on life saving drugs is an appreciable step as it has been reduced from 33% to nil. For other medicines this percentage has fallen from 12 % to 5 %.The same momentum has been carried to the reduction of GST on various medical equipment be it in surgery or medicine.Overall the GST Council has arrived at the people friendly reforms. Prime Minister Narendra Modi has expressed his happiness as the GST Council has agreed to the proposals submitted by the Union Government. The Prime Minister has stated that the wide-ranging reforms will improve the lives of our citizens and ensure ease of doing business for all, especially small traders and businesses. While hailing the Next Gen GST, Prime Minister in his post on social media site X has said, “During my Independence Day Speech, I had spoken about our intention to bring the Next-Generation reforms in GST. The Union Government had prepared a detailed proposal for broad-based GST rate rationalisation and process reforms, aimed at ease of living for the common man and strengthening the economy. Glad to state that @GST_Council, comprising the Union and the States, has collectively agreed to the proposals submitted by the Union Government on GST rate cuts & reforms, which will benefit the common man, farmers, MSMEs, middle-class, women and youth.The wide ranging reforms will improve lives of our citizens and ensure ease of doing business for all, especially small traders and businesses.” It has to be seen now as to how the two-tier tax structure okayed by the GST Council Meeting will change the face of the Indian economy from 22nd September.