India’s business community has warmly welcomed Prime Minister Narendra Modi’s announcement to overhaul the Goods and Services Tax (GST), describing it as a crucial step towards boosting demand, cutting compliance burdens and supporting growth.In his Independence Day address from the Red Fort, PM Modi said the government will simplify the GST framework by reducing the number of tax slabs. The proposal includes scrapping the current 12% and 28% rates, leaving two core slabs, 5% and 18%. Around 99% of items in the 12% category may shift to 5%, while 90% of those taxed at 28% could move to 18%.Positive industry responsePankaj Mohindroo, chairman of the India Cellular & Electronics Association (ICEA), called GST “an extraordinary reform” and said rationalising slabs would benefit both industry and consumers. “GST was an extraordinary reform and it was committed that GST would not increase tax on he general public but it has gone up in some pockets like mobile phones and electronics. The overall rationalisation into fewer slabs is very much on the cards because we have to prepare for Viksit Bharat @ 2047… GST reforms will put more money in the pocket of consumers and it will stimulate demand and it will be good for the industry and the consumers,” he was quoted as saying by news agency ANI.Economist Ved Jain said eight years of GST experience make this the right time for a structural change. “The Prime Minister’s announcement was basically that it has been eight years since GST was introduced and we have experience, collections have improved, AI is being used to carry out data analysis… Since we transitioned from VAT to GST, the government was unsure how it would turn out and the collections that would be made, so the government decided to go with four tax slabs- 6%, 12%, 18%, and 28%. After eight years, the number of tax rates must be reduced and there are likely to be two tax rates now- a standard rate between 12-18%, a merit rate, and a demerit rate… There is a structural reform that is required, given our experience”, he said.BJP MP and CAIT secretary general Praveen Khandelwal said it would ease pressure on small traders and MSMEs, especially before the festive season. PHDCCI’s CEO Ranjeet Mehta added that reforms expected by October would yield long-term benefits.Tax experts quoted by news agency PTI said the overhaul being described as “GST 2.0”, will address inverted duty structures, free up working capital, and make exports more competitive.Industry body CII hailed the move as “visionary” for ease of doing business and investor confidence. As cited by PTI, EY India’s Saurabh Agarwal said it comes at the right time, with GST collections for FY 2025–26 projected to cross Rs 22 lakh crore. Vineet Mittal of Avaada Group said the changes will “unleash entrepreneurship,” while Assocham highlighted benefits for jobs, skills, and self-reliance.Since its rollout in 2017, GST has unified India’s market but faced criticism over rate complexity and compliance challenges. The proposed reform aims to deliver a simpler, fairer, and more growth-friendly tax system.