Union Finance Minister Nirmala Sitharaman has signalled that further reductions to Goods and Services Tax (GST) rates are imminent, as the process of rationalizing tax slabs nears completion. Speaking at a media event in New Delhi, Sitharaman revealed that the revenue neutral rate (RNR), which stood at 15.8% when GST was introduced in July 2017, has now dropped to 11.4% in 2023 and is expected to decrease further.
The Finance Minister emphasized that the work on simplifying GST slabs is all but complete, with the GST Council, led by the Finance Minister and comprising state finance ministers, poised to take a final decision soon. Sitharaman also confirmed that she is personally reviewing the work of the Group of Ministers (GoM), which was established in September 2021 to recommend changes in GST rates and slabs, before presenting the proposal at the next GST Council meeting.
The GoM, consisting of finance ministers from six states, has been working to make the tax system more efficient, including reducing the number of tax slabs, streamlining rates, and addressing key concerns raised by various industries. The Union Minister emphasized that a final review is underway before presenting the proposal, stating, “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, rationalization of rates, looking at the number of slabs and so on.”
However, the Congress party has called for a complete overhaul of the GST system, arguing that mere rate reductions are not enough. Congress leader Jairam Ramesh emphasized that the government should prioritize creating a simplified and less punitive GST system, rather than simply reducing tax rates on select items. Ramesh cited the party’s 2024 Lok Sabha election manifesto, which proposed a ‘GST 2.0’ aimed at making the tax system truly ‘Good and Simple’.
Regarding stock market volatility, Sitharaman attributed it to global uncertainties, including wars, disruptions in the Red Sea, and piracy threats. The Finance Minister noted that predicting absolute stability in the markets is difficult due to these unpredictable global factors.
Sitharaman also touched on the government’s plans for public sector banks, stating that efforts are being made to increase public shareholding and have more retail investors participate in the banking sector. Additionally, she mentioned that India is actively engaging in negotiations with the European Union and the UK, prioritizing national interests.
In conclusion, the Union Finance Minister’s comments indicate that further reductions to GST rates are on the horizon, as the process of rationalizing tax slabs nears completion. While the Congress party has called for a comprehensive overhaul of the GST system, Sitharaman remains committed to simplifying and streamlining the tax system. As the process unfolds, it remains to be seen how these developments will impact Indian businesses and individuals.
Original Source: https://www.sentinelassam.com/more-news/national-news/fm-says-gst-rates-to-be-reduced-further-rationalised
Category : National News
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Publish Date: 2025-03-10 10:19:00
