By Sucheta Roy
Finance Minister Nirmala Sitharaman has announced an update on the government’s current efforts to reduce the Goods and Services Tax ( GST) structure.
In the ET award event, she said that the final decision on reducing rates tax slab rationalization is very close. She added that the government is almost on the edge of deciding on these changes.
While addressing the stakeholder’s concerns, Sitharaman has granted feedback suggesting that the GST reforms had not been given enough time to settle. Nirmala Sitharaman said, that the government has received feedback that the system was not ready and allowed to settle, which further led to some discouragement and she has also said that, she is now personally evaluating the works of GST groups to ensure that the reforms are arranged in the line with the country’s best interests.
She has also highlighted the progress that was made since the introduction of GST, noting that the Revenue Neutral Rate, which was set at 15.8 percent in the starting, had dropped to 11.4 percent by 2023. Dissolving the concerns that GST had made goods and services very expensive, Sitharaman questioned the critics to identify any items whose rates had increased after the implementation.
The Finance Minister has further indicated that the reductions in GST rates are expected to strengthen the government’s commitment in making taxation more consumer and business-friendly. She added that, if 15.8 percent has already come down to 11.4 then it is going to reduce further in the future.
The move is expected to give relief to businesses and consumers, as lower GST rates can lead to reduced costs on goods and services. Above all, the GST council has been working on rationalizing the tax structure, which aims to reduce the difficulty and improve compliance. The changes are most likely to impact multiple sectors and contribute to economic growth.