Finance Minister Nirmala Sitharaman said on Wednesday that changes in the GST structure will give relief to the common man, farmers, middle class, and small businesses (MSMEs).
In this reform, the 2% and 28% tax slabs are proposed to be removed, leaving only 5% and 18% slabs.
According to her, GST 2.0 will make the tax system simpler, transparent, and growth-oriented.
The Finance Ministry also posted on its official X account that this change will make essential goods cheaper, which will increase their consumption.
The Group of Ministers (GoM) of the GST Council discussed these reforms in a meeting held at Vigyan Bhavan, Delhi, on Wednesday.
GST 2.0 to Support Self-Reliant India
During the meeting, Sitharaman said the new system will encourage self-reliance and strengthen the manufacturing and MSME sectors. She called it an important step toward making India self-reliant.
The Finance Minister also presented the central government’s plan for the next generation GST reform before the GoM.
She mentioned that the government will finalize the decision in consultation with the states in the coming weeks.
Next Steps in GST Reform Discussions
According to a PTI report, the Finance Minister spoke for around 20 minutes, explaining why the GST structure needs to be improved and how it will benefit people.
She also requested the states to support the reform. The next GoM meeting will be held on August 21, where issues like simplifying tax slabs, insurance tax, and compensation cess will be discussed.
GST 2.0 Based on Three Pillars
Under the proposed system, goods will be taxed at 5% and 18%. However, “sin goods” such as pan masala, tobacco, and online gaming will be taxed up to 40%.
Currently, there are four GST slabs – 5%, 12%, 18%, and 28%. Essential food items are either taxed at 5% or not taxed at all, while luxury and harmful goods are taxed at 28%.
Sitharaman emphasized that GST 2.0 is built on three pillars:
Structural reform
Simplification of rates
Making life easier for people and businesses
