He congratulated Finance Minister Arun Jaitley and his team for engaging with various stakeholders for "extensive feedback which led to today's recommendations" on GST (Goods and Services Tax).
Modi's comments in a series of tweets came after the GST Council made sweeping changes to GST to give relief to small and medium businesses on filing and payment of taxes, eased rules for exporters and cut tax rates on more than two dozen items.
"Good and Simple Tax (GST) becomes even simpler. Today's recommendations will immensely help small and medium business," the prime minister said in a tweet.
Modi has been describing GST as 'Good and Simple Tax'.
"GST is in line with our constant endeavour to ensure interests of our citizens are safeguarded & India s economy grows," he added.
He said the composition scheme has been made more attractive and other facilitation measures will make the GST even more people-friendly and effective.
According to the changes made in the GST, businesses with annual turnover of up to Rs 1.5 crore, which constitute 90 per cent of the taxpayer base but pay only 5-6 per cent of total tax, have been allowed to file quarterly income returns and pay tax instead of the current provision of monthly filings.
Also, the turnover threshold for businesses to avail of the composition scheme that allows them to pay 1-5 per cent tax without going through tedious formalities, was raised to Rs 1 crore from current Rs 75 lakh.
Small and medium enterprises had complained of tedious compliance burden under the GST that was supposed to be a simple indirect tax regime which replaced over a dozen central and state taxes.
Jaitley, while briefing the media on the Council meeting, said a decision has been taken to cut GST rate on 27 common use items.
GST on unbranded namkeen, unbranded ayurvedic medicine, sliced dried mango and khakra has been cut to 5 per cent from 12 per cent, while the same on man-made yarn used in textile sector has been reduced to 12 per cent from 18 per cent.
Tax on stationery items, stones used for flooring (other than marble and granite), diesel engine parts and pump parts has been cut to 18 per cent from 28 per cent. GST on e-waste has been slashed to 5 per cent from 28 per cent.
Food packets given to school kids under Integrated Child Development Scheme (ICDS) will attract 5 per cent tax instead of 12 per cent.
Job works like zari, imitation, food items and printing items would attract 5 per cent tax instead of 12 per cent.
Government contracts involving high amount of labour will be levied 5 per cent GST instead of 12 per cent in order to contain cost of those programmes, he said.