PM Highlights Next-Gen GST Reforms for Inclusive Growth

Press Release Dated 15-08-2025

Prime Minister Reaffirms GST as Landmark Reform

On the occasion of the 79th Independence Day, the Prime Minister highlighted the significance of the Goods and Services Tax (GST) as a transformative reform in India’s economic journey. He emphasized that GST has not only streamlined the indirect tax regime but also played a vital role in enhancing transparency, reducing compliance burdens, and fostering a unified market. Looking ahead, the Prime Minister outlined a roadmap for the next phase of GST reforms, with a strong focus on ensuring stability, predictability, and inclusiveness in the system.

Structural Reforms for Greater Stability

The Government’s reform agenda rests on three core areas: structural reforms, rate rationalisation, and ease of living. Under structural reforms, attention will be directed towards correcting inverted duty structures that often result in the accumulation of input tax credit (ITC). The Government also aims to address classification disputes to ensure consistency in tax treatment and to reduce avoidable litigation. Importantly, the reforms seek to provide long-term stability in tax rates, enabling businesses to plan with certainty and fostering a conducive environment for investments.

Rate Rationalisation and Consumption Boost

The rate rationalisation agenda focuses on reducing tax incidence on both essential and aspirational goods to boost affordability, demand, and overall consumption. The proposals envisage moving towards a simplified dual slab system, replacing the current complex structure. This change will ensure that tax rates are more transparent and business-friendly. Additionally, the efficient use of fiscal space, particularly after the conclusion of the compensation cess, will allow the Government to balance revenue needs with the objective of promoting economic growth and consumer welfare.

Ease of Living Through Digital and Automated Systems

The third pillar, ease of living, is centred on leveraging technology to simplify compliance and improve taxpayer experience. Key measures include seamless digital registration processes, the introduction of pre-filled returns to minimise human error, and accelerated automated refunds, particularly to support exporters and businesses impacted by inverted duty structures. These proposals have been referred to the Group of Ministers for detailed review and will subsequently be placed before the GST Council. The Centre has reaffirmed its commitment to working closely with the States under the framework of cooperative federalism to ensure timely adoption and implementation of these reforms within the current fiscal year.

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