GST reforms to set economy open, transparent aiding small businesses: FM Sitharaman

Chennai: Union Finance Minister Nirmala Sitharaman said on Tuesday that the next generation GST reforms will create an open and transparent economy, reduce compliance burdens, and benefit small businesses.

Speaking at the 120th Foundation Day celebrations of City Union Bank in Tamil Nadu, the Finance Minister emphasised that Prime Minister Narendra Modi announced the creation of a task force for next-generation reforms with a clearer mandate to simplify regulations, lower compliance costs and also build a more enabling ecosystem for startups, and MSMEs.

FM Sitharaman was hinting at the rationale followed by the GST Council at its upcoming meeting. “All the banks are called upon to not only expand credit but also provide momentum for infrastructure development and ensure timely and need-based funding to MSMEs,” the Finance Minister added.

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FM Sitharaman further said that for India to achieve its vision of ‘Viksit Bharat 2047’, including the unbanked in formal banking and meeting various needs of banking support, is essential. “In the last 11 years, 56 crore Jan Dhan accounts have been opened, with total deposits of Rs 2.68 lakh crore. Of this, 67 per cent were opened in rural and semi-urban areas, and women hold 56 per cent of all accounts,” FM she said.

In his Independence Day address, PM Modi had announced there would be massive Goods and Services Tax (GST) reforms, promising a Diwali bonanza for citizens. As part of a comprehensive rate adjustment, the GST Council is scheduled to convene this week for a two-day meeting to re-examine GST rates on more than 150 items. The GST council plans to overhaul the rate structure, replacing the current four-rate structure with a two-rate structure by moving various items from the 12 per cent and 18 per cent GST slabs to the 5 per cent slab or to the Nil GST category.