With Goods and Services Tax (GST) 2.0 reforms set to roll in nationwide on Monday, first day of auspicious Navratri, Prime Minister Narendra Modi on Sunday said it is dawn of a new economic chapter and described the process as beginning of a Bachat Utsav.
Addressing the nation on the eve of the major recalibration of GST, he said adding to sweetness of festivities, “Tyohaaro ke iss mausam mein sabka muh meetha hoga. Desh ke har pariwar ki khushiya badhegi... I extend my heartfelt congratulations and best wishes to millions of families across the country for the Next Generation GST reforms and Bachat Utsav.
In the festival of savings, the new slabs will not only lighten the burden on households but also strengthen India’s position as a magnet for investment, a haven for entrepreneurs and a land where every State stands shoulder-to-shoulder in the race for development, Modi said in his nearly 20 minutes speech. He also laid much emphasis on self-reliance, manufacturing and small industry.
“Whatever we can make in our country, we must,” the Prime Minister also said in his address stressing upon the swadeshi and “Made in India” pitch amid tensions over trade tariffs imposed by the US. He urged the people of the country to take pride in selling and buying indigenous goods.
The way the country’s independence got strengthened by the ‘swadeshi’ movement, similarly, India’s prosperity will be empowered by the mantra of ‘swadeshi’, he said.
“From tomorrow, the nation will celebrate GST Bachat Utsav. Your savings will increase and you will be able to buy your favourite things. This reform will benefit every section of society,” Modi said.
The Prime Minister said the reforms would now serve as a “double bonanza” for the people, not only making essentials cheaper but also putting more savings into the hands of households.
At the heart of the reform is a sweeping simplification of the Goods and Services Tax structure. The GST Council earlier this month approved a streamlined two-tier rate system of five per cent and 18 per cent.
Nearly 99 per cent of goods once taxed at 12 per cent will now fall under the five per cent bracket, while about 90 per cent of items earlier under the 28 per cent slab will move down to 18 per cent. A 40 per cent compensation cess will, however, continue to apply to luxury and sin goods.
The Prime Minister credited the combined efforts of the Centre and States for freeing the nation from the burden of a dozen different taxes and making the dream of “one nation, one tax” a reality.
When India took a step towards GST reforms in 2017, a new beginning was made to script history, he said. The GST realised the ‘one nation-one tax’ dream, Modi said highlighting how the web of taxes and tolls had created hardships for businesses and consumers.
“At that time, millions of such companies, along with millions of countrymen, faced daily problems due to the maze of various taxes. The increased expenses incurred in transporting goods from one city to another were borne by the poor and customers like you were charged. It was essential to free the country from this situation,” he said.
Modi linked the new GST with the Union Budget decision earlier this year to make income up to Rs 12 lakh tax-free, a move aimed squarely at easing the burden on India’s growing middle class.
“When income tax relief up to Rs 12 lakh is granted, the lives of the middle class undergo a profound transformation, bringing about so much simplicity and convenience. Now, the poor, the neo-middle class and the middle class are receiving a double bonanza. With the reduction in GST, it will be easier for the citizens of the country to fulfill their dreams,” he said.
The Prime Minister pointed out that in the last 11 years, 25 crore Indians had emerged from poverty, forming what he described as a dynamic neo-middle class with aspirations of its own. He said the Government’s twin decisions, income tax relief and GST reforms, would together save the people of the country over Rs 2.5 lakh crore in a single year.
“We are moving forward by following the mantra of Nagrik Devo Bhava and we can see its reflection in the next generation’s GST reforms,” he said, underscoring the citizen-first philosophy driving the Government’s economic policies.
By dismantling the cluttered tax regime, Modi asserted that GST 2.0 would make doing business easier, attract greater investment and create a fairer marketplace.