- Prime Minister Modi announced next-generation GST reforms by Diwali 2025, focusing on reducing taxes on daily-use items and easing compliance for MSMEs.
- The GST Council will finalize specifics, with a meeting scheduled for September 3-4.
- Proposed changes include reducing GST slabs from seven to four: a special rate for jewellery, 5 percent, 18 percent, and 40 percent for sin goods.
- Economists estimate the overhaul could reduce revenues by ₹1.1–1.8 trillion annually, affecting both the Centre and states.
- The Union government received a record RBI dividend, but states lack a compensation guarantee since June 2022.
- Kerala’s Finance Minister has called for a new support mechanism for states if losses increase.
- Average gross GST collections in FY25 were about ₹1.84 trillion monthly.
- The GST mechanism was established through the 101st Constitutional Amendment in 2016 and implemented on July 1, 2017.
- GST subsumed most central and state indirect taxes into a dual structure: CGST, SGST, and IGST.
Source: a2ztaxcorp.net
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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