New Delhi [India], August 16 : Prime Minister Modi's announcement of sweeping GST reforms has received significant praise from the industry and business community.
PM Modi, in his address to the nation, announced that the government will revisit the provisions of GST and reform the structure.
After PM's speech, government sources said that the Centre has proposed to scrap the current slab of 12 per cent and 28 per cent of GST rates and keep only 5 per cent and 18 per cent GST rates.
They further added that as part of the initiative, 99 per cent of the 12 per cent slab is proposed to move to the 5 per cent slab, and 90 per cent of the items in the 28 per cent slab are proposed to move to the 18 per cent slab.
Chairman of India Cellular & Electronics Association (ICEA) Pankaj Mohindroo said, "GST was an extraordinary reform and it was committed that GST would not increase tax on he general public but it has gone up in some pockets like mobile phones and electronics. The overall rationalisation into fewer slabs is very much on the cards because we have to prepare for Viksit Bharat @ 2047... GST reforms will put more money in the pocket of consumers and it will stimulate demand and it will be good for the industry and the consumers."
Economist Ved Jain said, "The Prime Minister's announcement was basically that it has been eight years since GST was introduced and we have experience, collections have improved, AI is being used to carry out data analysis... Since we transitioned from VAT to GST, the government was unsure how it would turn out and the collections that would be made, so the government decided to go with four tax slabs- 6%, 12%, 18%, and 28%. After eight years, the number of tax rates must be reduced and there are likely to be two tax rates now- a standard rate between 12-18%, a merit rate, and a demerit rate... There is a structural reform that is required, given our experience."
Ranjeet Mehta, CEO & Secretary General, PHDCCI, said that the GST reforms by October are going to benefit the country in the coming years.
The move to cut GST on daily-use items and simplify tax slabs will greatly benefit small traders, MSMEs, and the retail sector, while giving a big push to the economy ahead of the festive season, said BJP MP and Secretary General of the Confederation of All India Traders ( CAIT), Praveen Khandelwal, reacting to the announcement.