New Delhi: The rationalisation of tax slabs marks an important step towards building a simpler, transparent, and more efficient tax system, the US-India Business Council (USIBC) has said. 

In a statement, USIBC said it looks forward to continuing its partnership with the government of India and its stakeholders to build on these reforms, foster greater bilateral trade and investment, and contribute to a more inclusive and sustainable economic future.

“Such forward-looking reforms not only improve the business climate in India but also send a strong signal to global investors about the country’s commitment to fostering growth and ease of doing business,” the Council said in the statement posted on X social media platform.

It extended its appreciation to Prime Minister Narendra Modi, the GST Council and the Finance Ministry over the recent tax reforms.

“We commend the government's efforts to boost consumption and improve the ease of doing business in India. The reduction of GST on products across sectors — including food, healthcare, life-saving drugs, renewable energy devices, and electronics — will not only improve consumer access and affordability and benefit businesses but also strengthen India’s growth story,” the Council further stated.

The GST rationalisation will lead to a shift toward a dual-slab structure from September 22. The 5 per cent and 18 per cent GST slab replaces the current 4-tier structure, along with a 40 per cent slab for luxury and sin goods (mostly intoxicants).

The revenue of India Inc. will likely grow 6-7 per cent during the current financial year because of the reduction in the GST rates. The reductions will have a positive impact on consumption, which accounts for 15 per cent of the revenue of corporates, according to a Crisil Intelligence Report.

The timing of the cuts is also apposite, coming amid continuing global uncertainties, and coincides with the festival and wedding season in India when consumption typically peaks annually, the report points out.

(IANS)