Diwali gift coming as GST reform, tax on common items of use to go down: PM Modi
After Goods and Services Tax has been administered in the country for eight years, it is time to launch another chapter of GST reforms said Prime Minister Narendra Modi and promised a gift during Diwali in the form of reduced taxes on many items.
Kolkata: Come Diwali and Indians will get a gift in the form of GST reforms that will result in lowering of prices on many items, Prime Minister Narendra Modi promised in his Independence Day speech. Speaking from the ramparts of the Red Fort, he said that a high powered committee has been set up for "the next generation GST reforms".
"This Diwali I will gift you double Diwali. The people of this country will get a very big gift. We carried out a lot of GST reforms in the past 8 years. We have reduced the GST burden. We have simplified the system. It is the demand of the time to review it after 8 years. We have consulted the states too to set up a high power committee. We are brining the next generation GST reforms. It will become a gift as the GST burden will be slashed on a number of common items of use. MSMEs will be benefitted and the economy will also get a new force," said the PM.
Modi said that the exercise will result in decline in GST rates on many items and emphasised that it will also be of special help to MSMEs (medium and small enterprises), indicating it provide tailwinds to this sector which is so vital to the economy of the nation. Diwali will be observed on October 20 this year.
GST collections jumped 9.4% in FY25
GST was launched on July 1, 2017, ending a tangled web of central and state levies with a single, unified tax. Over the past eight years, GST collections have risen fast. In the last financial year, GST collections touched a record high of Rs 22.08 lakh crore -- a 9.4% growth compared to FY24. The average monthly collection in FY25 hit Rs 1.84 lakh crore. Moreover, the FY25 GST revenue indicated a 100% jump compared to the GST collection in FY21. That year, the total GST revenue was Rs 11.37 lakh crore.
Consulting major Deloitte has described FY25 as a blockbuster year for GST, attributing the surge to appropriate reforms, unambiguous guidance to taxpayers and regular upgrades on the GST portal.
Currently, Indian GST rates are as follows: 0% on items of basic necessities; 5%, 12%, 18%, 28% as standard goods and services. Other rates include 3% on gold and silver.
"Zero income tax till 12 lakh income unthinkable"
In his speech, the Prime Minister also referred to the income tax reforms his government has ushered in. "None could image that income till Rs 12 lakh would be free from taxes," he said saying if the country is progressing, people should get the benefits. He also referred to income tax steps such as streamlining Income Tax refund, faceless assessment.