Next gen gst: The proposed reform in Goods and Service Tax (GST) can be implemented in the middle of the current financial year. But due to this, many big states have expressed concern that their revenue will suffer heavy losses when the Next Generation Reform is effective. According to the government officials of the states, due to the proposed reforms, they can suffer a loss of Rs 7000 to 9000 crore every year. According to the report of Indian Express, this shortage can have a direct impact on the social development and administrative functioning of the states.

Effect on revenue growth
States say that according to internal assessment, the speed of revenue growth can come down to 8%. This rate has been 11.6% in the last few years, while it was about 14% before GST was implemented in 2017.

UBS estimate
According to the International Brokerage House UBS, the revenue loss from GST in FY 2026 is eligible. According to this estimate, annually, there may be a loss of 1.1 trillion rupees i.e. 0.3% of GDP. At the same time, in 2025-26 this loss can remain up to about 430 billion rupees (0.14%of GDP). This deficiency can be compensated through RBI’s dividend and additional surplus cess transfer.

The report quoted by news agency ANI as saying that GST cuts are more effective than individual income tax or corporate tax cuts to promote consumption, as it directly affects shopping.

Significantly, in a speech from the Red Fort on Independence Day, PM Modi announced the implementation of Next Generation GST Reform before Diwali. The government says that the direct benefit of this reform will be given to consumers, small industries and MSMEs.

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Next gen gst reforms: Prime Minister Narendra Modi made a big announcement of GST reforms in his speech from the ramparts of the Red Fort on Independence Day. After the announcement of PM Modi, the Finance Ministry also made it clear that the government is currently working towards simplifying the GST structure. According to news agency PTI, officials believe that this improvement will lead India to “single tax system” in future and by 2047, a uniform tax rate may be applicable in the country.

Single tax system by 2047

At present, there are four slabs in GST – 5 percent, 12 percent, 18 percent and 28 percent. Under the new proposal, 12 percent and 28 percent slabs will be abolished. After this, most of the items will be absorbed in the rate of 5 percent and 18 percent. At the same time, it has been suggested to keep a special 40 percent tax rate for luxury and harmful items.

Officials say that this change will boost the economy and consumers will get relief from tax burden. It is being called “Next Generation GST”, as it is considered to be the most important step in the category of India’s economic reforms.

New GST reforms till Diwali

The government wants this new system to be implemented by Diwali. For this, the Center has sent a proposal to a group of finance ministers of the states. This group will study the proposal and keep its recommendation in the meeting of the GST Council to be held in September. If the council approves it, then before Diwali, consumers can start getting many items cheaper.

According to the senior official, when this new system is fully implemented and India reaches the category of developed countries, then the government can consider implementing the same rate of GST. He said that this model is suitable for developed countries, because there is almost the same to the citizens’ income and spending. However, this is not the right time for India right now.

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