Page 33 - NIS English 01-15 October, 2025

New GST Reforms of New India | COVER STORY

What is the big change in Next Gen GST Q It’s fine for traders… but what about me? Will
Q my daily expenses really reduce?
reforms? What difference will it make?
Yes! Groceries, medicines are all now in simpler
Earlier, there were 4 tax slabs; now only 2 are A slabs. Most essentials will remain at 0 or 5% and
A
left. The first is 5%, on mass consumption most services are in the 18% slab.
goods and services. Whereas 18%, includes
most goods and services. Most of the goods Q Has the GST on all agricultural machinery/
of the 28% slab applicable have now come in equipment been reduced?
the 18% slab. Cars, ACs, TVs, prices have come The GST rate on agriculture machinery/
down by 10% or more. A equipment such as, sprinklers, drip irrigation

system, Agricultural, horticultural or forestry
machinery for soil preparation or cultivation;
Why was there more tax on raw materials
Q lawn or sports-ground rollers, harvesting or
and less tax on finished goods earlier?
threshing machinery, including straw or fodder
balers; grass or hay mowers, other agricultural,
The problem of “inverted duty” has been
A reduced in GST 2.0. Refunds will be easily horticultural, forestry, poultry-keeping or bee-
available, and businessmen’s money will not be keeping machinery, composting machines etc,
which earlier attracted 12% GST, has now been
stuck. reduced to 5%.

Will MSMEs still have a compliance Why has agricultural machinery not been
Q Q
burden in GST 2.0? fully exempted?
A The objective of the rate rationalisation is to
No! With reduced compliance burden with
A respect to annual return filing, easy refunds, maintain a balance between users and producers.
and simplified registrations, GST 2.0 has made While providing relief for the farmers, it is
important that the domestic manufacturing
compliance faster, easier, and smarter for the does not get adversely impacted. If agricultural
MSME sector. machinery is fully exempted, the manufacturers/
dealers of these goods would not be able to
Will the reduction in tax rates hurt states? claim input tax credit on the GST paid on raw
Q
materials and will have to reverse the ITC paid
No. The 12% slab, anyway, generated very on the inputs. This would increase their effective
A
little revenue. Bringing goods from 28% tax incidence and cost of production. This may,
to 18% will boost demand. A 40% tax on in turn, be passed on to farmers in the form
luxury/demerit goods and services will keep of higher prices, which in turn would make the
states’ revenues strong. measure counterproductive.

mously approved. Since July 1, 2017, GST has been the and that is why India’s economic growth rate is around
tax system of the new India, the tax system of Digital 8%. This means India is the fastest-growing economy in
India. It is not just about ease of doing business, but the world. This is the strength and resolve of 140 crore
also about transforming the way business is done. It is Indians. Therefore, India has reaffirmed its commit-
not just a tax reform, but a significant step towards eco- ment to reforms, with GST 2.0 being the latest initiative,
nomic reform. Behind these reforms lies a grand vision as part of its ongoing efforts to make India self-reliant.
– ease of living and ease of doing business. Today, the Undoubtedly, this reform has unified India under a
inflation rate is also very low and under control, which common tax system, boosting business activity, revital-
is the hallmark of good governance that prioritizes izing the economy, and helping to control inflation. n
public welfare. When decisions are made in the public Scan the QR code to watch the press
interest and national interest, the country progresses, conference on GST by Union Finance
Minister Nirmala Sitharaman.

October 1-15, 2025 || NEW INDIA SAMACHAR 31