Bhubaneswar, Sep 3 (PTI) Odisha Chief Minister Mohan Charan Majhi on Wednesday said the GST Council approvals and reforms will directly benefit farmers, MSMEs, small traders and middle-class families.

Majhi said this while attending the 56th GST Council meeting in New Delhi, chaired by Union Finance Minister Nirmala Sitharaman.

"The Council approved relief in GST on life & health insurance, agri-inputs, farm machinery and life-saving medicines, along with rationalisation to support tribal livelihoods. These reforms will directly benefit farmers, MSMEs, small traders and middle-class families," Majhi said.

Stating that the reforms place citizens at the core, ensuring ease of living, ease of doing business and accelerating India's progress towards becoming a Developed Nation by 2047, Majhi said: "The rate rationalisation proposal of the Group of Ministers is a welcome move that will benefit the common man and will ease compliance, lower business costs, and make India's tax system simpler and more efficient." While elaborating on some issues concerning all the states and some issues specific to Odisha, Majhi said he wholeheartedly supports the proposal of the Union government and the recommendation by the Group of Ministers on the exemption of Life and Health Insurance.

"This will make insurance more accessible for middle‑ and lower income groups and improve insurance penetration in India," he said.

On the various proposals deliberated by the Group of Ministers regarding Compensation Cess, the Odisha Chief Minister said he welcomes the merger of items which are currently subject to compensation cess in the GST framework.

"Surplus in the compensation cess account may be shared between the Centre and States in the ratio of 50:50. Among states, it may be distributed based on each state's share of GST revenue calculated on the base year formula," he said.

Further, he said the date for abolition of levy of compensation cess may be kept as October 31.

"I strongly endorse the proposal of the GoM on rate rationalisation. This will particularly benefit our tribal communities engaged in kendu leaf collection in Odisha," he pointed out.

Reduction of tax from 18% to 5% will result in increase in volume of sales of Kendu leaves through government procurement agencies, he said, adding that this will help the workers engaged in kendu leaf collection to get higher price from vendors in the de-regulated areas.

Stating that the agriculture sector is the backbone of the economy, he said the proposed rate reduction in agricultural inputs, machinery and others will ease the financial burden on farmers, lower production costs, and make essential items more affordable. This step will encourage growth in the sector, strengthen rural income, and contribute to food security for the nation, he added.

The rate reduction in the pharma sector, especially on life-saving and commonly used drugs, will make treatment more affordable for patients, the chief minister said while strongly supporting all the proposals of the law committee.

Particularly, the agenda on simplified GST registration scheme for small and low-risk businesses will provide a simple, hassle-free online GST registration approval process for small traders, start-ups and self-employed individuals.

"It will save their time, reduce compliance cost and encourage them to join the formal economy. This scheme will also strengthen trust between taxpayers and the government," he said. PTI AAM AAM RG

GST rate rationalisation: reforms simplify compliance and lower indirect taxes to aid farmers, small traders and households. The GST Council approved a package including GST rate rationalisation, exemptions for life and health insurance and selected agri inputs, reduced rates on farm machinery and life saving medicines, restructuring and proposed sharing of compensation cess surplus between Centre and States, and a simplified online GST registration scheme for small and low risk businesses to lower compliance costs and broaden formalisation.