Finance Minister Engages with Industry Leaders for Feedback

• Finance Minister Nirmala Sitharaman met with industry leaders to gather feedback on the upcoming GST 2.0 reforms.
• Key proposals include scrapping the 12 percent slab and moving to a simplified three-rate system to boost compliance and consumption.
• The reforms also aim to resolve classification disputes, especially around food items, for greater clarity and revenue efficiency.

The administration has ramped up initiatives to implement GST 2.0 reforms with Finance Minister Nirmala Sitharaman convening an essential meeting today with representatives from India Inc to collect their insights and expectations regarding the upcoming changes to the Goods and Services Tax framework. As per government sources, the meeting includes presentations from industry executives and involves participation from high-ranking officials from the Ministry of Finance, Ministry of Corporate Affairs, and Chief Economic Adviser V Anantha Nageswaran.

“FM is meeting with India Inc, there will be presentations on GST 2.0”, authorities reported. The discussions aim to yield significant insights and foster agreement with states toward a more streamlined and cohesive tax system.

A primary emphasis of the reform is the rationalization of the GST rate structure, with plans to eliminate the 12 percent slab and transition to a three-rate system consisting of 5 percent, 18 percent, and 28 percent to supersede the present four-tier system. Officials contend that this will diminish litigation, improve compliance, and increase consumer demand.

“Efforts are ongoing to rationalise the GST structure, and the government is determined to move towards a simpler regime that supports economic growth without compromising on revenue”, remarked another official.Economists advocate for this transition, observing that consumption responds more acutely to alterations in indirect taxes compared to direct taxes.

The Centre anticipates that these reforms will invigorate spending and alleviate the burden of conducting business.Another important element of GST 2.0 is addressing classification conflicts, particularly concerning food items, which have often resulted in legal disputes and revenue losses.

Enhancing clarity and consistent treatment of goods is prioritized to mitigate such challenges.Since it was launched in July 2017, GST has evolved into a fundamental component of India’s indirect tax framework. However, ongoing complications related to structure, classification, and compliance remain hurdles, prompting this push for comprehensive reform.

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