Major GST Changes: Benefits for the Public and Businesses

The government is proposing to simplify the GST system.

The central government has proposed major reforms in the **Goods and Services Tax (GST)** system, with the aim of making the tax more **accessible and transparent**. The plan is to reduce the current four tax slabs—5%, 12%, 18%, and 28%—to just two main slabs: **'Standard'** and **'Merit'**. Additionally, specific tax rates will apply to certain special goods and services.

Why is This Change Necessary?

The main purpose of these reforms is to give the Indian economy a new direction. These changes are being made primarily to achieve the following objectives:

The changes are also expected to provide **relief to the common people**. Prime Minister Narendra Modi had previously hinted that "next-generation reforms" would be made in GST, which would reduce the tax burden on essential daily-use items. This will directly benefit people like the **middle class, women, and farmers**.

What Else is in the Proposal?

These proposed reforms are not limited to just tax slabs. They also include several other important initiatives:

• **Essential Items to Become Cheaper:** The tax rate on daily-use goods will be reduced, which will lower their prices and make them more accessible to the general public.
• **Reduction in Legal Disputes:** The simplification of tax rates will reduce legal disputes over how much tax applies to a particular item.
• **Promotion of Domestic Companies:** Domestically manufactured goods will be promoted, which will further strengthen the 'Atmanirbhar Bharat' campaign.
• **Easier Digital Processes:** The GST registration and return filing processes will be made even simpler and more digital for small business owners.
• **Faster Refunds:** Tax refunds will be processed quickly and easily for exporters and some other taxpayers, preventing their working capital from being blocked.