GST Rates to be Further Reduced, Rationalisation on the Horizon: Finance Minister Nirmala Sitharaman
Union Finance Minister Nirmala Sitharaman announced that Goods and Services Tax (GST) rates will be further reduced as the process of rationalising tax slabs is nearing completion. This move aims to simplify the tax structure and make it more efficient for businesses and consumers alike.
New Delhi: Union Finance Minister Nirmala Sitharaman announced that Goods and Services Tax (GST) rates will be further reduced as the process of rationalising tax slabs is nearing completion.
This move aims to simplify the tax structure and make it more efficient for businesses and consumers alike.
GST Rate Reduction and Simplification Process
FM Sitharaman revealed that the revenue neutral rate (RNR), which was 15.8% when GST was introduced in July 2017, has now decreased to 11.4% in 2023. She assured that the rate would continue to decrease as the government works on simplifying GST slabs.
During a media event in the national capital, Sitharaman mentioned that the GST Council, which is led by her and includes state finance ministers, is in the final stages of simplifying the tax slabs. The council is expected to make a final decision on the matter soon.
Review and Final Decision on GST Rationalisation
Sitharaman acknowledged the excellent work done by the Group of Ministers (GoM), which was set up in September 2021 to suggest changes to GST rates and slabs. The GoM, consisting of finance ministers from six states, has been working on improving the efficiency of the tax system.
The Finance Minister stated, “Now, at this stage, there is one more look that I would (take), the groups have done excellent work, but I still have taken it upon myself to, once more, completely review each of the groups’ works, and then probably take it to the Council to see if we can come to a final conclusion on this.”
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Expected Changes in GST System
The rationalisation process will focus on reducing the number of tax slabs, streamlining rates, and addressing concerns raised by various industries. Sitharaman emphasized that the final review is underway before presenting the proposal at the next GST Council meeting.
“We’ll take it to the next council (meeting). We are very close to coming to a final call on some of the very critical issues, reduction, rationalisation of rates, looking at the number of slabs and so on,” she stated.
Global Uncertainties and Stock Market Volatility
When asked about the recent volatility in the stock market, Sitharaman attributed it to global uncertainties, including ongoing conflicts, disruptions in the Red Sea, and piracy threats. She mentioned that predicting stability in the markets is challenging due to these unpredictable global factors.
Public Sector Bank Initiatives
On the government’s initiatives for public sector banks, Sitharaman shared that efforts are being made to increase public shareholding in these banks. The goal is to encourage retail investors to participate more actively in the banking sector, which will enhance public involvement.
India’s Trade Negotiations
Sitharaman also discussed India’s ongoing trade negotiations. She highlighted that India is working towards a mutually beneficial trade deal with the United States and is engaged in talks with the European Union and the United Kingdom. However, she stressed that India’s national interests remain a priority in all these discussions.
With GST rate reductions and the simplification process nearing completion, along with other ongoing initiatives, the government is focused on boosting economic growth and making the tax system more transparent and efficient.
