India's Path to Economic Prowess: Tax Reforms and GST Adjustments Unveiled

Finance Minister Nirmala Sitharaman highlights India's strategic tax reforms and regulatory ease aimed at transforming the nation by 2047. Key announcements include a new Income Tax Bill, reduction in customs tariff rates, GST exemptions on prasadams, and timeline extensions for exporters. The Finance Bill 2025 marks a pivotal step in these reforms.

India's Finance Minister, Nirmala Sitharaman, has reiterated the government's dedication to creating a predictable tax environment and simplifying business regulations. This initiative is part of a grand plan to achieve a developed India by 2047. Central to these reforms is a new Income Tax Bill awaiting approval by a special Committee, separate from the Finance Bill. The Finance Bill 2025 passed with substantial amendments proposes far-reaching changes.

Sitharaman announced slashing customs tariff rates on industrial goods, trimming the number of tariff slabs from 21 to eight. Under her leadership, the principle of charging either a cess or a surcharge, but not both, will be implemented. "We have reduced seven tariff slabs, providing clarity on taxing where only a cess or surcharge is applied," she noted, emphasizing the significance of this adjustment.

In another key move, the minister extended the timeframe for exporters to utilize imported components from six months to a year. She assured that religious prasadams will continue to be GST-exempt while a Group of Ministers examines GST cuts on their ingredients. Rare disease medicines will be free from Integrated GST charges, aiding both patients and researchers. Sitharaman firmly stated that states have received their GST compensations, pointing out that the ongoing cess collections fund COVID-related debts, expected to be repaid by 2026.

(With inputs from agencies.)