New Delhi, August 15(HS): In a major tax reform push, Prime Minister Narendra Modi, in his Independence Day address on Friday, unveiled plans for a sweeping overhaul of the Goods and Services Tax (GST) regime. Building on this announcement, the Finance Ministry has proposed a simplified two-slab GST rate structure, with special rates reserved only for select items.

According to the ministry, the proposal—shared with the Group of Ministers (GoM)—is built on three pillars: structural reforms, rationalisation of rates, and easing the lives of citizens. Under the suggested framework, goods of daily necessity and aspirational consumer products will see tax reductions, providing relief to households and boosting small businesses.

Currently, India’s GST system operates under four slabs—5%, 12%, 18%, and 28%. The proposed plan seeks to replace these with just two rates: a ‘Standard’ and a ‘Concessional’ slab, while retaining special rates for a few targeted goods.

PM Modi has assured that the GST reforms will be rolled out before Diwali, aiming to lower tax burdens, spur economic activity, and particularly benefit micro and small enterprises.

The crucial GST Council meeting, chaired by Union Finance Minister Nirmala Sitharaman, is expected in September, where the GoM’s recommendations will be debated with a view to finalising this landmark rate rationalisation.

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Hindusthan Samachar / Jun Sarkar