Embassy of India

Antananarivo, Madagascar

Ambassador’s Remarks during the Press Briefing on the 

Next Generation GST Reforms

(15 September 2025)

***

Representatives of the Media in Madagascar,

Ladies and Gentlemen,

Good Morning! Today, I would like to brief you about the “Next Generation Reforms in GST (Goods and Services Tax)” recently announced by the Government of India.

2. You might be aware that during his address to the nation on the occasion of the Independence Day of India on 15 August 2025, Prime Minister Narendra Modi had announced that the Government will bring about Next Generation GST reforms to reduce the tax burden on the people of India, as a Diwali (Festival of Lights) gift. In line with this vision, the 56th meeting of the GST Council chaired by the Minister of Finance of India H.E. Mrs. Nirmala Sitharaman in New Delhi on 3 September 2025 has recommended a package of comprehensive reforms in the GST, with a simplified 2-tier rate structure (5% and 18%), with sweeping reductions in the rates of GST on household goods, medicines, agricultural machinery, cement, two-wheelers, small cars, air conditioners, TV sets, handicrafts etc, to lower the prices for consumers, boost demand-driven consumption and spur the growth in the manufacturing sector of India.

3. As a way of background, I would like to inform you that in July 2017, the Government of India had rolled out the Goods and Services Tax (GST) as a path-breaking legislation to create a unified national tax system and a single national market with common tax rates and procedures across various states of India. At that time, GST had subsumed 17 different indirect taxes and 13 different cesses into one unified tax, symbolizing the economic integration of the country. As a result, the number of GST tax payers has increased from 6.6 million in 2017 to 15.1 million in 2025 and overall GST collections has doubled in the past 4 years amounting to Rupees 22 trillion (Approx. US$ 260 billion).

4. I would like to highlight a few sectors which will benefit from the recent reforms of GST, which are also called GST 2.0 as they build on the success of GST 1.0. As per the new GST reforms which will take effect from 22 September 2025, the tax on goods like soap, shampoo, toothbrush, toothpaste, tableware, handicrafts, toys, school supplies, medicines, bicycles, tractors, etc will be reduced to 5%. Tax on 33 life-saving drugs, health insurance and life insurance will be reduced to Zero. Tax on small cars, two-wheelers, buses, trucks will be reduced to 18%. The Next Generation GST reforms are designed to not only reduce taxes but also create a virtuous cycle growth by lowering the prices, support the domestic manufacturing, widen the tax payer base and create conditions for long-term sustainable growth of India, in order to achieve Viksit Bharat (Developed India) by 2047.

***