Mon Aug 18 07:50:00 UTC 2025: Okay, here’s a news article summarizing and rewriting the provided text:

**Headline: Modi Government Unveils Consumer-Centric GST Revamp, Promises Simpler, Lower Taxes**

**NEW DELHI, August 17, 2025** – In a move touted as a “fundamental change” in India’s taxation system, the Narendra Modi government is preparing to roll out a revamped Goods and Services Tax (GST) regime aimed at benefiting consumers, particularly the poor, Micro, Small and Medium Enterprises (MSMEs), the middle class, and farmers. Senior government sources confirmed on Sunday that the new system, previewed in Prime Minister Modi’s Independence Day address, is targeted for implementation by Deepavali (October 20).

The core of the reform involves a simplified two-tier GST structure with rates of 18% and 5%, replacing the current multi-tiered system. The government expects this simplification and rate rationalization to boost economic activity, leading to increased compliance and revenue collection.

“The new GST regime will make our taxation more equitable, and will see reduced taxes on what these four categories consume,” said a senior functionary, emphasizing a consumer-centric approach.

While the change may initially result in reduced revenue, the government anticipates that increased consumption and compliance will quickly offset any losses, ensuring fiscal sustainability. A significant portion of items currently taxed at 28% will be moved to the 18% bracket, while a small number of “sin goods” may be subject to a higher 40% rate.

The central government is actively engaging with state governments to secure their buy-in for the reforms. Two Groups of Ministers (GoMs), comprised of state representatives, will be reviewing the proposals before they are presented to the GST Council for final approval. The government anticipates widespread support for the changes, arguing that opposition-ruled states would be hard-pressed to oppose tax cuts for the common citizen.

Furthermore, the central government is set to cease the compensation cess, which was introduced to compensate states for revenue losses due to the implementation of GST. While the loan taken to compensate States will be repaid before time, this creates a problem for the Centre as the cess also applies on sin goods like tobacco, which requires an overhaul soon.

Government sources downplayed any connection between the GST reforms and ongoing global economic uncertainties, including tariff threats from the United States.

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