Less Tax, More Savings, and 'Swadeshi': Decoding PM Modi's 'Diwali Gift' For Desh

Prime Minister Narendra Modi focussed on the merits of the GST reforms, and laid much emphasis on self-reliance, manufacturing, and small industry, in a 19-minute address to the nation today, a day before Navratri when reduced GST rates come into effect. In this season of festivals, everyone's happiness will increase, PM Modi said."On the first day of Navratri, the country is going to take an important and big step for Atmanirbhar Bharat. With the sunrise tomorrow, the next generation GST reforms will come into effect. A 'GST bachat utsav (savings festival)' will begin tomorrow," he said.Doubling down on the "swadeshi” and “made in India” pitch amid tensions over trade and talent with the US, he urged the people to take pride in selling and buying

indigenous goods. The way the country's independence got strengthened by the Swadeshi movement, similarly, India's prosperity will be empowered by the mantra of 'swadeshi', he said.The 'GST bachat utsav (savings festival)' coupled with the income tax exemption, will be a "double bonanza" for most of the people, PM Modi said."Combined with the Income Tax relief (effectively zero tax for those with incomes up to ₹12 lakh a year, announced in the last budget), the GST reforms will now mean savings of ₹2.5 lakh crore for Indians," he said, adding the "poor, middle class, neo middle class, youths, farmers, women, traders and shopkeepers will benefit" from the move.He congratulated all on the next generation GST reforms. "These reforms will accelerate India's growth story, increase ease of doing business and attract more investors," PM Modi said.GST Reforms in 2017 Scripted HistoryHe said that the GST reforms by his government in 2017 scripted history.He said GST realised the 'one nation-one tax' dream. Modi highlighted how the web of taxes and tolls had created hardships for businesses and consumers.Citing income tax exemption on earnings up to Rs 12 lakh and GST reforms, he said it is a "double bonanza" for the poor, neo-middle class, and middle class.He also said the GST move would benefit MSMEs big time.Prime Minister Modi urged the people of the country to take pride in selling and buying indigenous goods.The way the country's independence got strengthened by the Swadeshi movement, similarly, India's prosperity will be empowered by the mantra of 'swadeshi', he said.From kitchen staples to electronics, from medicines and equipment to automobiles, goods and services will be cheaper from Monday as the reduced GST rates on about 375 items come into effect.In a bonanza to consumers, the GST Council, comprising the Centre and states, had decided to reduce the tax rates on goods and services, from September 22 -- the first day of the Navaratri.The GST will now be a two-tier structure wherein the majority of goods and services will attract tax of 5 and 18 per cent. A 40 per cent tax will be levied on ultra luxury items, while tobacco and related products will continue to be in the 28 per cent plus cess category.Till now, Goods and Services Tax (GST) was levied in 4 slabs of 5, 12, 18 and 28 per cent. Besides, a compensation cess is levied on luxury items and demerit or sin goods.Mass consumption items like ghee, paneer, butter, 'namkeen', ketchup, jam, dry fruits, coffee and ice creams, and aspirational goods like TV, AC and washing machines will become cheaper.`With inputs from PTI