FM Sitharaman Announces Further Reductions in GST Rates
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Synopsis
The Union Finance Minister Nirmala Sitharaman has confirmed plans to further lower Goods and Services Tax (GST) rates as the rationalization of tax slabs approaches its final stages. A review of the proposed adjustments is currently underway.
Key Takeaways
- GST rates to be reduced further.
- Rationalization of tax slabs is almost complete.
- Revenue neutral rate has dropped to 11.4%.
- Final decisions expected at the next GST Council meeting.
- Increased public shareholding in banks targeted.
New Delhi, March 9 (NationPress) The Union Finance Minister Nirmala Sitharaman has declared that Goods and Services Tax (GST) rates will see further reductions as the initiative to rationalize tax slabs approaches its conclusion.
During a press conference in the national capital, FM Sitharaman indicated that the revenue neutral rate (RNR), which initially stood at 15.8 percent upon the introduction of GST in July 2017, has been reduced to 11.4 percent in 2023 and is expected to decline further.
She remarked that the efforts to simplify GST slabs are nearly complete. The GST Council, chaired by the finance minister and including state finance ministers, is anticipated to reach a decisive conclusion shortly.
'At this point, I intend to conduct another comprehensive review of the work done by the groups (GoM). They have performed excellently, but I want to ensure all aspects are considered before presenting it to the Council for a final determination,' stated the Finance Minister.
The GoM was established in September 2021 to recommend modifications to GST rates and slabs. This committee comprises finance ministers from six states and aims to enhance the efficiency of the tax system.
The rationalization effort involves minimizing the number of tax slabs, optimizing rates, and addressing significant concerns from various industries.
The Union Minister reaffirmed that a conclusive review is currently in progress prior to submitting the proposal at the upcoming GST Council meeting.
'We will present it at the next council meeting. We are on the verge of making final decisions on several critical matters, including rate reductions and the number of slabs,' FM Sitharaman stated.
When questioned about stock market fluctuations, the finance minister linked these to global instabilities, such as conflicts, disruptions in the Red Sea, and piracy threats.
FM Sitharaman acknowledged that predicting absolute market stability is challenging due to these unpredictable global elements.
Regarding plans for public sector banks, the Union Minister mentioned efforts to boost public shareholding.
The objective is to attract more retail investors to public sector banks, thereby increasing public involvement in the banking sector.
Concerning the India-US trade agreement, the Finance Minister indicated that both nations are working towards an agreement that benefits both parties.
FM Sitharaman further emphasized that India is actively negotiating with the European Union and the United Kingdom, ensuring that national interests remain paramount.
