Finance Minister Nirmala Sitharaman provided an important update on the government’s efforts to simplify the Goods and Services Tax (GST) system, revealing that the government is nearing a final decision on reducing GST rates and rationalising tax slabs. Speaking at the ET Awards event, she said that the government is is very close to finalising its stance on GST rate and slab reductions.
Addressing concerns raised by stakeholders, Sitharaman acknowledged that there had been some criticism that the GST reforms were not allowed sufficient time to settle down. “We had feedback that you are not allowing it to settle down, so there was an element of discouragement,” she said, adding that she herself was reviewing each of the GST group’s work to ensure the changes are in the best interest of the nation.
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Earlier reduction in GST rates
During the same event, Sitharaman also provided clarity on the progress made since GST was launched, revealing that the Revenue Neutral Rate (RNR), initially set at 15.8%, has already decreased to 11.4% by 2023.
“15.8% was lesser than pre-GST. So let me dispell any Doubting Thomas’s here, that the GST has made life costlier after it was introduced, item by item I would challenge anyone to tell me if there is any one item for which GST rate has gone up after its introduction,” she said.
GST rate reduction and rationalistion
The Finance Minister also indicated that further reductions in GST rates are on the horizon, assuring that the rates would continue to decrease. “If 15.8% has become 11.4%, it has only come down even further,” she added, signaling the government’s plans to lower rates even further.
The FM added that she has taken it upon herself to carefully review each GST-ralted proposal before presenting it to the GST Council for a final decision. These forthcoming changes, she noted, aim to simplify the system, reduce rates, and ultimately offer relief to taxpayers.
First Published: Mar 8, 2025 8:06 PM IST