'Committed to continue this journey of reforms...': PM Narendra Modi hails benefit of GST for households

Prime Minister Narendra Modi hailed the benefits of the Goods and Services Tax (GST), which have made household goods cheaper. 

Sharing a report on the comparison of household goods prices before and after the implementation of GST, the PM said that his government is committed to reforms. 

“For us, reforms are a means to improve the lives of 140 crore Indians. After the introduction of GST, goods for household use have become much cheaper. This has resulted in significant savings for the poor and common man. We are committed to continuing this journey of reforms to transform people’s lives,” he said in a post on X (formally Twitter). 

On July 1, 2017, GST laws were implemented, replacing a complex web of central and state taxes. Under the Indian GST, goods and services are categorized into different tax slabs, including 5 percent, 12 percent, 18 percent and 28 percent. 

According to data by the Central Board of Indirect Taxes and Customs (CBIC), the majority of household items including flour, cosmetics, television, refrigerator etc have become cheaper post GST implementation.  

Meanwhile, the Centre may be able to repay Rs 2.69 lakh crore loans it had taken to compensate states for GST revenue loss in FY21 and FY22 by November 2025, four months ahead of its scheduled repayment, PTI reported. 

The full repayment of the market borrowings is expected earlier than the previously calculated timeline of March 2026. The issue is expected to be taken up for discussion in the next meeting of the GST Council in August. 

The compensation cess was initially brought in for five years to make up the revenue shortfall of states, following the implementation of the Goods and Services Tax (GST). 

The compensation cess expired in June 2022, but the amount collected through the levy is being used to repay the interest and principal of the Rs 2.69 lakh crore that the Centre had borrowed during COVID-19. 

The Centre had borrowed and released Rs 1.1 lakh crore in 2020-21 and Rs 1.59 lakh crore in 2021-22 as back-to-back loans to meet a part of the shortfall in cess collection and help to reduce the resource gap of the states due to the short release of compensation. 

In June 2022, the Centre extended the levy of compensation cess, which is imposed on luxury, sin and demerit goods, till March 2026 to repay borrowings taken in FY21 and FY22 to compensate states for revenue loss.