PM Modi Announces Next-Generation GST Reforms to Boost Economy, Ease of Living

New Delhi, August 15: Prime Minister Narendra Modi, in his 79th Independence Day address, highlighted the Goods and Services Tax (GST) as one of India’s most significant economic reforms since its launch in 2017 and outlined plans for a new phase of improvements aimed at benefiting citizens and strengthening the economy.

The proposed reforms, anchored on three pillars — structural reforms, rate rationalisation, and ease of living — have been submitted by the Centre to the Group of Ministers (GoM) of the GST Council for deliberation.

Key proposals include:

• Structural reforms: Correcting inverted duty structures to reduce input tax credit accumulation and support domestic value addition; resolving classification disputes to simplify compliance and ensure consistency; and providing long-term stability in rates and policies to boost business confidence.
• Rate rationalisation: Lowering taxes on essential and aspirational goods to improve affordability; reducing GST slabs towards a two-tier structure of standard and merit rates; and using the fiscal space from ending the compensation cess to align rates for long-term sustainability.
• Ease of living: Streamlining registration processes with technology-driven timelines; introducing pre-filled GST returns to minimise manual intervention; and ensuring faster, automated refunds for exporters and businesses affected by inverted duty structures.

The Prime Minister said these measures would reduce disputes, strengthen key sectors, stimulate consumption, and foster economic expansion. The government aims to build consensus with states under the spirit of cooperative federalism, with the goal of implementing reforms within the current financial year.

The Centre reaffirmed its commitment to evolving GST into a simple, stable, and transparent tax system that supports inclusive growth, enhances the formal economy, and improves ease of doing business nationwide.