Prime Minister Narendra Modi expressed his approval of the newly introduced two-tier Goods and Services Tax (GST) framework, which will take effect from September 22. Describing the reform as a crucial step toward building a “next-generation GST,” Modi emphasized that the restructuring will directly benefit farmers, micro, small, and medium enterprises (MSMEs), the middle class, women, and the youth of the nation. He highlighted that this move represents not only an economic reform but also a people-centric measure designed to make everyday life simpler and more affordable for ordinary citizens.
In a detailed post on the social media platform X, Modi recalled his Independence Day address in which he had committed to advancing comprehensive GST reforms. He explained that the Union government had already drafted and submitted a thorough proposal aimed at rationalising GST rates and improving processes, with the dual goals of reducing compliance burdens and strengthening the broader economy. He described the reforms as broad-based, targeting both structural efficiency and ease of living for the common man.
The Prime Minister further pointed out that the GST Council—comprising representatives from both the central and state governments—had reached a consensus in approving these reforms. According to him, this collective decision highlights the spirit of cooperative federalism while ensuring that the benefits of reform extend across different sections of society.
The announcement came shortly after Finance Minister Nirmala Sitharaman unveiled the significant restructuring, which simplifies the GST framework by replacing the earlier multi-slab system with just two standard rates: 5% and 18%. In addition, a 40% rate will continue to be imposed on luxury and sin goods, ensuring that high-end consumption is taxed more heavily. The new rates will officially take effect on September 22, coinciding with the beginning of Navratri, a symbolic day chosen to mark the launch of a fresh chapter in tax reform.
Modi concluded his remarks by underlining the wide-ranging nature of these reforms. He reiterated that the changes will ease the financial and compliance burden on businesses, particularly MSMEs, while also lowering costs for households and empowering vulnerable groups such as women and farmers. According to him, the simplified two-tier GST is not just a technical adjustment but a transformative step toward a more robust, fair, and inclusive economy.
