New Delhi, Sep 21: Prime Minister Narendra Modi unveiled GST 2.0 on Sunday, calling it the dawn of next-generation tax reforms that would put India’s “one nation, one tax” journey on a fast track.
Addressing the nation via video conferencing, PM Modi said that only 5 percent and 18 percent slabs would remain under the new regime.
He said that the reforms mark the beginning of a ‘GST Bachat Utsav’, promising cheaper essentials, affordable homes and vehicles, lower insurance costs, and higher savings for millions of Indians.
Hailing the move as a turning point in India’s growth story, the PM said that the poor, middle class, farmers, traders, and entrepreneurs alike would reap the benefits of this simplified structure.
Extending heartfelt greetings to all citizens on the commencement of Navratri, the festival of worshipping Shakti, he said that from the very first day of Navratri, the nation was taking a significant step forward in the Aatmanirbhar Bharat campaign.
Beginning at sunrise on September 22, the country will implement next-generation GST reforms.
PM Modi said that this marks the beginning of a GST Bachat Utsav (savings festival) across India.
He said that this festival would enhance savings and make it easier for people to purchase their preferred items.
The PM said that the benefits of this savings festival would reach the poor, middle class, neo middle class, youth, farmers, women, shopkeepers, traders, and entrepreneurs alike.
He said that in this festive season, every household would experience increased happiness and sweetness.
Extending his congratulations, PM Modi conveyed best wishes to crores of families across the country for the next generation GST reforms and the GST savings festival.
He said that these reforms would accelerate India’s growth story, simplify business operations, make investments more attractive, and ensure that every state becomes an equal partner in the pursuit of development. Recalling that India took its first steps towards GST reform in 2017, marking the end of an old chapter and the beginning of a new one in the country’s economic history, the PM said that for decades, citizens, and traders were entangled in a complex web of taxes – Octroi, Entry Tax, Sales Tax, Excise, VAT, and Service Tax – amounting to dozens of levies across the nation.
He said that transporting goods from one city to another required crossing multiple checkpoints, filling numerous forms, and navigating a maze of differing tax rules at every location.
PM Modi shared a personal memory from 2014, when he assumed office as PM, mentioning a striking example published in a foreign newspaper.
He said that the article described the challenges faced by a company that found it so difficult to send goods from Bengaluru to Hyderabad, a distance of just 570 km, that it preferred to ship the goods from Bengaluru to Europe and then back to Hyderabad.
The PM said that such were the conditions due to the entanglement of taxes and tolls.
He said that the earlier example was just one among countless instances.
PM Modi highlighted that lakhs of companies and crores of citizens faced daily hardships because of the complex web of multiple taxes.
He said that the increased cost of transporting goods from one city to another was ultimately borne by the poor and recovered from customers like people.
Emphasising that it was imperative to free the nation from the prevailing tax complexities, the PM said that upon receiving the mandate in 2014, the government prioritised GST in the interest of the people and the nation.
He said that extensive consultations were held with all stakeholders, every concern raised by states was addressed, and solutions were found for every question.
PM Modi said that by bringing all states together, such a monumental tax reform in independent India became possible.
He said that it was the result of joint efforts by the Centre and the states that the country was liberated from the maze of multiple taxes, and a uniform system was established across the nation.
The PM said that the dream of ‘one nation-one tax’ was realised.
He said that reform was a continuous process, and as times change and national needs evolve, next-generation reforms become equally essential.
PM Modi said that keeping in view the current requirements and future aspirations of the country, these new GST reforms were being implemented.
He said under the new structure, only 5 percent and 18 pecent tax slabs would primarily remain.
The PM said that most everyday-use items would become more affordable.
He listed food items, medicines, soap, toothbrushes, toothpaste, health and life insurance among the many goods and services that will either be tax-free or attract only a 5 percent tax.
PM Modi said that of the items previously taxed at 12 percent, 99 percent – virtually all – had now been brought under the 5 percent tax bracket.
Highlighting that in the past 11 years, 25 crore Indians had overcome poverty and emerged as a significant neo middle class segment playing a vital role in the country’s progress, he said that this neo middle class had its own aspirations and dreams.
The PM said that this year, the government had gifted tax relief by making income up to Rs 12 lakh tax-free, bringing substantial ease and convenience to middle-class lives.
He said that now it was the turn of the poor and the neo middle class to benefit.
PM Modi said that they were receiving a double bonanza – first through income tax relief, and now through reduced GST.
He said that with lower GST rates, fulfilling personal dreams would become easier for citizens – whether it’s building a house, purchasing a TV or refrigerator, or buying a scooter, motorcycle, or car – all would now cost less.
The PM said that travel would also become more affordable, as GST on most hotel rooms had been reduced.
He expressed happiness over the enthusiastic response of shopkeepers towards the GST reforms and said that the government was actively working to pass on the benefits of GST reductions to customers.
PM Modi said that in many places, boards displaying price comparisons – before and after the reforms – were being prominently displayed.
Underlining that the mantra of ‘Nagarik Devobhava’ was clearly reflected in the next generation GST reforms, he said that when the income tax relief and GST reductions were combined, the decisions taken over the past year would result in savings exceeding Rs 2.5 lakh crore for the people of India.
The PM said that this was precisely why he calls it a ‘Bachat Utsav’.
Emphasising that achieving the goal of a developed India requires unwavering commitment to the path of self-reliance, he said that a major responsibility in making India self-reliant rests with the MSMEs – India’s micro, small, and cottage industries.
PM Modi said that whatever meets the needs of the people and can be manufactured within the country must be produced domestically.
Highlighting that reduced GST rates and simplified procedures would significantly benefit India’s MSMEs, small-scale industries, and cottage enterprises, he said that these reforms would boost their sales and reduce their tax burden, resulting in a double advantage.
The PM expressed high expectations from MSMEs and underscored their historic role as the backbone of India’s economy during its peak of prosperity.
He said that India’s manufacturing and product quality were once globally recognised and superior.
PM Modi said the need to reclaim that pride, urging that products made by small industries must meet the highest global standards.
He said that India’s manufacturing should surpass all benchmarks with dignity and excellence, and that the quality of Indian products must enhance the country’s global identity and prestige.
The PM called upon all stakeholders to work with this goal in mind.
He said that just as the mantra of Swadeshi empowered India’s freedom struggle, it would similarly energise the nation’s journey toward prosperity.
PM Modi said that many foreign items had unknowingly become part of daily life, and citizens often do not even realise whether the comb in their pocket was foreign or indigenous.
“There is a need to liberate ourselves from such dependence,” he said, and urged people to buy products that are ‘Made in India’, infused with the hard work and sweat of the country’s youth.
The PM called for every household to become a symbol of Swadeshi and every shop to be adorned with indigenous goods.
He encouraged people to proudly declare their commitment to Swadeshi – ‘I buy Swadeshi,’ ‘I sell Swadeshi’ and said that this mindset must become intrinsic to every Indian.
PM Modi said that such a transformation would accelerate India’s development.
He appealed to all state governments to actively support the ‘Aatmanirbhar Bharat’ and ‘Swadeshi’ campaigns by boosting manufacturing in their regions with full energy and enthusiasm, and by creating a conducive environment for investment.
The PM said that when the Centre and states move forward together, the dream of a self-reliant India would be fulfilled, every state would develop, and India would become a developed nation.
Concluding his address, he extended warm wishes for the GST ‘Bachat Utsav’ and the auspicious occasion of Navratri.
