New Delhi, Aug 4 (PTI) RSS affiliates on Thursday hailed reduction in GST rates as "bold and people-friendly" reforms under Prime Minister Narendra Modi's "visionary" leadership, and said it will encourage domestic industries, empower MSMEs and strengthen the foundation for making India self-reliant.

GST rates on common use items ranging from hair oil to corn flakes, TVs, and personal health and life insurance policies were slashed after the GST Council on Wednesday approved a complete overhaul of the tangled Goods and Services Tax regime.

The GST Council approved rate overhaul by limiting slabs to 5 per cent and 18 per cent effective from September 22, the first day of Navaratri.

Welcoming the move, Swadeshi Jagran Manch (SJM) national convenor R Sundaram said it is a "bold GST reforms" under the visionary leadership of Prime Minister Modi.

"Reduction and simplification of the GST rates is not just a fiscal move but a Swadeshi-oriented reform that will encourage domestic industries, empower MSMEs, support traders and artisans and further strengthen the foundation of ‘Make in India’ and ‘Aatmanirbhar Bharat’," he added.

Sundaram said the GST reforms are indications of a "structural change" in India's development journey.

"Reducing the tax burden on households and MSMEs will increase their purchasing power and consumption demand, which will have a multiplier effect on (India's) GDP," he said.

Bharatiya Mazdoor Sangh (BMS) general secretary Ravindra Himte said it's a "significant step" towards a "people-friendly and common man tax structure".

Traditionally, the indirect tax regime was "heavily reliant" on taxing day-to-day needs of the citizens, he said.

"This trend has now been reversed through the next-gen reforms which introduce a primarily two-rate GST system aimed at reducing the tax burden on people, while imposing higher taxes on luxury goods consumed by the high-income group," he added.

“We hope that manufacturers, insurance companies and others will promptly pass on the benefits (of GST rate cuts) to the common man by lowering the prices of essential daily-use items,” the BMS general secretary said.

The Laghu Udyog Bharati hailed reduction in GST rates as a "landmark move towards 'Atmanirbhar' Bharat' and said the rationalised rate slabs of 5 per cent and 18 per cent mark a "transformative shift" in India's indirect taxation system.

"We commend the visionary leadership of Prime Minister Narendra Modi and the prudent guidance of Finance Minister Nirmala Sitharaman in ushering in this long-awaited reform," Laghu Udyog Bharati’s president Ghanshyam Ojha and general secretary Om Prakash Gupta said in a joint statement.

The GST 2.0 reforms will not only benefit industries but also ensure that the consumers eventually enjoy the positive impact through lower prices and improved access to goods and services, they added. PTI PK PK KVK KVK

GST rate overhaul limits slabs to standard bands, expected to reduce household and MSME tax burden and support domestic industry. The GST regime was restructured by limiting slabs to 5 per cent and 18 per cent, effective from the specified implementation date, simplifying rates into primarily two bands to reduce the tax burden on households and MSMEs while imposing higher taxation on luxury or higher-end items; stakeholders urged prompt pass-through of benefits to consumers and framed the change as supporting domestic industry and structural reform of indirect taxation.