With the rollout of reduced GST rates on 375 items from September 22, Central Board of Indirect Taxes and Customs (CBIC) Chief Sanjay Kumar Agarwal has emphasised the need for proactive engagement by tax officers to guide trade and industry through the transition.
In a weekly newsletter to tax officers, Agarwal underlined that “as these transformative reforms take effect, the need of the hour is to handhold the trade and industry in navigating the transition smoothly. Proactive outreach and effective interactions will be crucial to ensure that taxpayers clearly understand the revised tax rates and compliance simplifications.”
He added that greater awareness would “not only minimise confusion but also enable businesses, particularly small traders and MSMEs, to adapt seamlessly and fully benefit from the reforms.”
The GST Council, in its meeting last week, approved a two-tier GST structure of 5% and 18%, alongside a special rate of 40% for tobacco, related products, and ultra-luxury items. The new rates will take effect from September 22, except for tobacco products, which will continue to be taxed at 28% plus a compensation cess until December 31. Currently, GST is levied at four slabs — 5%, 12%, 18%, and 28%.
Agarwal highlighted the broader impact of these reforms, noting that “lower tax incidence on common man essentials will reduce household expenses, while affordable inputs for farmers, artisans, and manufacturers will boost production, employment and exports.”
He framed the changes as more than just rate cuts, describing them as “a paradigm shift towards a fairer and more citizen-centric tax framework.”
The 56th GST Council meeting also approved a simplified GST registration scheme for small and low-risk businesses, set to start on November 1.
Under the optional scheme, low-risk applicants, or those whose output tax liability on supplies to registered persons does not exceed Rs 2.5 lakh per month, will receive automated registration within three working days of application. Businesses can voluntarily opt in or withdraw from the scheme.
Additionally, the Council has sanctioned faster clearance of refunds arising from inverted duty structures, as well as claims related to zero-rated supply of goods and services, a move expected to improve liquidity for businesses.
Agarwal concluded by stressing that “these process reforms will ensure ease of doing business for all, especially small traders and businesses,” signalling the government’s intent to support a smooth transition while strengthening compliance and transparency.
Source #ET
