GST 2.0: An Industry Perspective on Simplification, Growth, and the Road Ahead
UPSC Relevance
Prelims: Indian Economy (Fiscal Policy, Taxation - GST, MSMEs, Industry bodies like CII); Governance.
Mains:
General Studies Paper 2 (Governance): Role of civil society and other stakeholders (industry bodies like CII) in governance.
General Studies Paper 3 (Economy): Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment; Government policies and interventions; Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.
Key Highlights from the News
GST 2.0 reform is a historic step forward in India's indirect tax framework, as assessed by industry organizations like the Confederation of Indian Industry (CII).
Key Changes:
Replaced the old four-slab structure (5%, 12%, 18%, 28%) with a simplified 5% (essential goods), 18% (standard), and 40% (luxury/sin products).
Procedural simplifications to reduce compliance burden.
Main Benefits:
For Consumers: Reduced prices of goods, which will help control inflation.
For Industries (especially MSMEs): Lower input costs, reduced litigation, and simplified compliance burden.
For the Economy: Increased consumption, which will help boost GDP growth by more than one percentage point.
Challenges: The main challenges ahead are ensuring that these tax benefits are passed on to consumers and providing support to MSMEs to adapt to the new system.
CII states that the industry is ready to cooperate with the government for the success of these reforms.'
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