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Upcoming GST reforms will ensure open, transparent economy: FM Sitharaman ahead of GST council meet - BusinessToday

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  Published in Business and Finance on Sunday, September 14th 2025 at 1:52 GMT by Business Today
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India’s Finance Minister Prepares GST Council for a Sweeping “Open, Transparent Economy” Push

On a bright September morning, Finance Minister Nirmala Sitharaman addressed a gathering of media, industry leaders, and tax officials, announcing a new suite of Goods and Services Tax (GST) reforms that the government intends to present at the upcoming GST Council meeting. The reforms aim to streamline compliance, broaden the tax base, and create a more transparent, “open” economy that can compete with global peers. In this article, we distill the key points from Sitharaman’s briefing, trace the legislative context, and explain why the changes matter for every Indian taxpayer—from large corporates to small‑scale entrepreneurs.

1. Why the GST Reforms Matter

Since its launch in July 2017, the GST has been heralded as the single most transformative tax overhaul in India’s history. Yet, by 2025, a significant portion of the Indian economy still operates outside the formal tax net. Informal traders, unregistered small businesses, and complex compliance requirements have all slowed economic growth and increased costs for legitimate firms. The newly announced reforms are designed to:

• Expand the tax base: By broadening the coverage of GST to more categories of goods and services.
• Reduce compliance costs: By simplifying filing rules and easing thresholds.
• Increase transparency: By pushing for universal electronic invoicing and real‑time data exchange.
• Align India with global best practices: By adopting mechanisms similar to those in the EU and other major economies.

Minister Sitharaman emphasized that these reforms would “further enhance India’s competitive edge” and “build investor confidence.”

2. Key Reform Highlights

3. How the Reforms Will Be Implemented

Minister Sitharaman outlined a phased rollout plan:

1. Immediate Implementation (within 3 months): E‑invoice threshold and simplified return filing will take effect from the next tax period.
2. Mid‑Term Adjustments (6–12 months): CGST/SGST integration and the compliance dashboard will be rolled out, accompanied by extensive training for tax officials.
3. Long‑Term Vision (1–2 years): Full formalization of the informal sector and the complete alignment of GST with the Digital India infrastructure.

In addition, the Finance Ministry will release a “GST Reform Toolkit”—a digital handbook and a series of webinars—to guide businesses through the transition.

4. Industry Reactions

• Manufacturing Sector: The Federation of Indian Chambers of Commerce & Industry (FICCI) welcomed the simplified return filing, noting that it would free up 12–15 hours of compliance work per month for large firms.
• Retail & E‑commerce: The Retailers Association of India (RAI) expressed cautious optimism about the e‑invoice threshold, citing concerns about the readiness of smaller retailers to adopt digital platforms.
• Small Business Owners: Many SMEs welcomed the lower compliance costs but are wary of the new e‑invoicing requirements and the potential impact on cash flow.

5. The Bigger Picture: India’s Open Economy Strategy

The reforms are part of the government’s broader “Open Economy” agenda. By standardizing tax rules, reducing administrative friction, and creating a transparent regulatory environment, India aims to attract more foreign direct investment (FDI). The reforms also dovetail with the “Make in India” initiative, encouraging domestic manufacturing to thrive in a predictable tax climate.

6. Upcoming GST Council Meeting

The GST Council, composed of finance ministers from all states, will convene on 10 September 2025 in New Delhi. The Ministry of Finance has scheduled a pre‑meeting briefing to discuss the reform proposals and gather stakeholder feedback. After the Council’s deliberation, a consensus will be reached on the exact measures, amendments, and timelines.

7. What Taxpayers Should Do Now

1. Check Your Current Turnover: If you’re close to the ₹1.5 crore e‑invoice threshold, start planning for digital invoicing.
2. Review Your Return Filing Frequency: Anticipate the shift to semi‑annual filing and adjust your accounting processes accordingly.
3. Engage with GST Consultants: Seek professional advice to navigate the transition, especially if you are part of the informal sector.
4. Keep an Eye on Official Communications: The Ministry of Finance will publish a detailed circular once the reforms are approved.

8. Bottom Line

The Finance Minister’s announcement signals a decisive shift toward a more inclusive, streamlined, and transparent tax regime. While the changes will require adjustments, they promise to level the playing field for businesses of all sizes and make India a more attractive destination for global investors. The upcoming GST Council meeting will be the crucible where these proposals are refined and ultimately adopted, setting the course for the next chapter of India’s tax journey.