Prime Minister Narendra Modi promised the tax dilution of Diwali, and could come through a major reform on the tax of goods and services that transport the panels to only two, reduce daily use taxes, and automate recovery operations, while the government calls it “re -seizing three most important” taxes in India.
On the occasion of Independence Day 79, Modi GST praised a major reform that reshaped the Indian economy since its launch in 2017. Now, the center aims to a more clean, more clear and more people’s tax system. The Ministry of Finance submitted a proposal to the Commodity and Services Tax Council, with reforms based on structural reforms, rationalization of prices, and ease of living.
The plan is now reviewed by a group of ministers (GOM), and implementation is targeted during the current fiscal year, at the appropriate time for Diwali.
Pillar 1: structural repairs
The center wants to end the incompatibility between input tax rates and outputs – known as the inverted fee structure – to reduce the accumulation of tax credit and enhance local manufacturing. It also plans to simplify classification problems, which currently cause confusion, conflicts and headaches. The stability of a long -term rate and a policy is a major targets to help industries better planning and investment with confidence.
Pillar 2: Rationalization of average – Painting only
At the core of the repair, there is a radical simplification: move towards only two plates of goods and services-“standard” and “merit”-to replace the current sliding structure. Special prices will only be applied to a few elements.
The proposal also includes tax cuts on basic and ambitious commodities to increase the ability to withstand costs and consume an engine. This is expected to benefit from large sections of the middle-class families to students and farmers.
CESS ending the GST compensation is a financial space that is needed, giving the central area to rationalize tax rates in the long run.
Pillar 3: Ease of living
The third station focuses on small companies and digital ease. It suggests a smooth registration system moved by technology, the proceeds of the pre -filled goods and services to reduce errors and human intervention, and a faster recovery for exporters and those who deal with inverted fees structures.
The Ministry of Finance said that the center is committed to working closely with the states under the spirit of cooperative federalism. The Commodity and Services Tax Council will be traded on GOM recommendations at its next session, focusing on rapid operation.
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