The GST Council has made a big move that could change how India’s economy works. They decided to remove the old 12% and 28% tax slabs and replace them with simpler rates of 5% and 18%. This is seen as a quiet but powerful reform that can boost consumer confidence and positively influence the stock market.
Experts believe this change is the first major reform under the current government. It aims to make things easier for consumers and encourage more spending, which can help the economy grow. The move is also expected to support long-term development and help India become more self-reliant, especially during uncertain global times.
This tax reform is likely to benefit many sectors like automobiles, consumer durables, cement, hotels, insurance, retail, renewable energy, oil and gas, and banking. Many domestic companies are expected to gain from these changes, which aim to simplify the tax system and boost growth.
The government isn’t just focusing on tax cuts; they see this as a way to promote economic growth. By making rates and processes easier, the goal is to encourage people to spend more and help businesses expand.
Prime Minister Narendra Modi has indicated that more reforms could follow across different sectors. These steps are meant to unleash business energy and protect the economy from global challenges.
The GST council is also tackling issues like inverted duty structures in sectors like textiles and fertilizers. They’ve made it easier for businesses to claim Input Tax Credits (ITC), helping small businesses access blocked credit quickly. This will make it easier for small traders and MSMEs, boosting ease of doing business and opening new growth opportunities.
Overall, these GST reforms are set to improve everyday life for citizens, make it easier to do business, especially for small businesses, and strengthen India’s economy for the future.
