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The Central Board of Indirect Taxes and Customs (CBIC) has highlighted the importance of guiding businesses through the upcoming GST changes. With reduced rates on 375 items coming into effect later this month, the GST Council has streamlined the tax structure into two main slabs of 5 and 18 per cent, while tobacco and ultra-luxury goods remain at higher rates. The reforms aim to lower household expenses, support farmers and manufacturers, and simplify compliance for small traders and MSMEs. Additional measures include a simplified registration process and faster refund clearances.
The CBIC has emphasized the need for proactive engagement by tax officers as GST rates on 375 items are set to be reduced later this month. Sanjay Kumar Agarwal, CBIC Chief, pointed out that clear communication and guidance will help trade and industry adapt smoothly to the changes. He noted that raising awareness will prevent confusion and allow small traders and MSMEs to fully benefit from the reforms. Advertisement
The GST Council recently approved a two-tier tax structure of 5 and 18 per cent, with tobacco products and ultra-luxury goods continuing at higher rates-tobacco items remaining at 28 per cent plus compensation cess until the end of the year. Previously, GST was levied in slabs of 5, 12, 18, and 28 per cent.
In his newsletter to tax officers, Agarwal highlighted that lower taxes on essentials will ease household expenses, while affordable inputs for farmers, artisans, and manufacturers are expected to boost production, employment, and exports. He described these reforms as more than rate cuts, representing a shift towards a fairer and more citizen-focused tax system.
The CBIC Chief stressed that proactive outreach and effective interaction with businesses will be key to ensuring taxpayers understand the revised rates and simplified compliance procedures. These measures are expected to make doing business easier, particularly for smaller traders.
The 56th GST Council meeting also approved a simplified GST registration scheme for small and low-risk businesses starting in November. Under this optional scheme, registration will be granted automatically within three working days for low-risk applicants whose output tax liability does not exceed INR 2.5 lakh per month. The scheme allows businesses to voluntarily opt in or withdraw as needed.
Additionally, the Council agreed to expedite the clearance of refunds arising from the inverted duty structure and claims from zero-rated supply of goods or services, providing quicker relief to businesses.
Source PTI
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