On this Independence Day at the ramparts of Red Fort, Prime Minister Narendra Modi announced the Next Generation of GST reforms by Diwali. The Prime Minister’s vision of creating a more efficient and citizen-friendly economy was realised as the GST Council on 3rd September approved rates rationalisation with a focus on the common man.
The Council has simplified the indirect tax system into a two-tier structure of 5 per cent and 18 per cent from a four-tier structure of 5 per cent, 12 per cent, 18 per cent and 28 per cent. These reforms have reduced tax rates in many sectors, easing the lives of citizens. Today we look at the reforms undertaken for Micro, Small and Medium Enterprises (MSMEs).
Our correspondent reports that the GST reforms have been carried out with a focus on the common man and will come into effect from 22nd of this month.
The GST Council, in its meeting on Wednesday, announced the consolidation of its complex tax system into two slabs of 5 percent and 18 percent, and removed the cess system. For e-commerce the recent GST reforms are helping to ease both, making online shopping cheaper and businesses more competitive. First, the cost of packaging materials like cartons, boxes, trays, and packing paper has come down. With GST reduced to just five percent, sellers now spend less on each shipment.
This is especially helpful for MSMEs and food processing units, where every rupee saved on packaging adds to their margins and makes products more affordable for consumers.
Meanwhile, trucks and delivery vans, the backbone of India’s supply chain, are carrying nearly seventy percent of the country’s goods, which is now under eighteen percent GST instead of twenty eight percent. This means cheaper vehicles, lower freight rates, and more efficient last-mile deliveries
Together, these reforms are reshaping India’s e-commerce and logistics ecosystem. From packaging to delivery, the entire chain becomes more cost-effective. This not only supports small sellers and online platforms but also strengthens the nation’s competitiveness in global supply chains.
Vice President of Vilayat Industries Association, Harish Joshi, hailed the new GST set-up as a major reform initiative from the MSME sector’s perspective. He added that this will stimulate demand and boost consumption.
GST reforms are expected to significantly benefit India’s MSME sector by reducing compliance burden and lowering costs. The sector has welcomed the GST council’s decision to rationalise rates, calling it a crucial step to improve competitiveness, boost market access, and support business formalisation. With this move, MSMEs are likely to get smoother cash flows and supply chain efficiencies, enabling them to expand their footprint in both domestic and export markets
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