Will GST Cuts Empower Citizens and Stimulate the Economy?
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Synopsis
Discover how the recent cuts in GST are set to put extra money in the pockets of citizens, prompting increased spending and stimulating economic growth. NSE CEO Ashishkumar Chauhan highlights the profound impact of these changes on India's financial landscape.
Key Takeaways
- GST slabs reduced from four to two.
- Tax rates on personal care items lowered from 18% to 5%.
- Packaged snacks now taxed at 5% instead of 12%.
- Expected GDP growth rate of over 8%.
- Increased compliance and reduced tax evasion.
New Delhi, Sep 4 (NationPress) The Managing Director and CEO of NSE, Ashishkumar Chauhan, expressed his approval on Thursday regarding the government's move to streamline the Goods and Services Tax (GST) framework. He emphasized that reduced tax rates will enable citizens to retain more of their earnings, leading to increased spending and fostering a positive economic cycle.
Chauhan extended his congratulations to Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman for this landmark decision to cut GST slabs from four to two.
He stated, “Fair tax rates will bolster compliance and diminish tax evasion. This reform is poised to enhance economic activity across the nation.”
The NSE leader mentioned that this adjustment will not only streamline the tax system but also set the stage for an anticipated GDP growth rate exceeding 8 percent in the years ahead.
“I firmly believe that fair taxes will lead to increased compliance and a significant decrease in tax avoidance or evasion. This overall reduction in rates simplifies the system, as recently decided,” Chauhan articulated.
He noted that the initiation of the GST in 2017 was a pivotal moment, and this latest adjustment will further bolster India’s economic narrative.
“Indeed, the introduction of GST in 2017 was a significant move, and this recent action will greatly contribute to achieving India’s goal of 8 percent plus GDP growth moving forward,” he remarked.
In related news, on Wednesday, the GST Council, led by Finance Minister Nirmala Sitharaman, abolished the 12 percent and 28 percent rates, maintaining only the 5 percent and 18 percent slabs.
This new tax structure is set to be implemented from September 22.
As part of these modifications, the tax rate on personal care products such as hair oil, shampoo, toothpaste, and dental floss has been slashed from 18 percent to 5 percent.
Additionally, packaged snacks including namkeens, bhujia, mixtures, and chabena have also transitioned to the 5 percent slab from the previous 12 percent.
Point of View
It is crucial to recognize the significant implications of the recent GST adjustments. While the government aims to enhance compliance and stimulate the economy, it is essential to monitor the long-term effects on revenue generation and public services. The focus should remain on ensuring that these changes positively impact the average citizen.
NationPress
04/09/2025
Frequently Asked Questions
What are the new GST slabs introduced?
The GST Council has reduced the tax slabs from four to two, retaining only 5% and 18% rates, effective from September 22.
How will these GST changes impact citizens?
Lower tax rates will increase disposable income for citizens, encouraging spending which is expected to stimulate economic growth.
What items have seen a reduction in tax rates?
Personal care items and packaged snacks have seen their tax rates cut significantly, benefiting consumers directly.
Who is responsible for this reform?
The GST cuts were announced by the Finance Minister Nirmala Sitharaman and supported by NSE’s Ashishkumar Chauhan.
What is the expected GDP growth rate following these changes?
The alterations in the GST structure aim to facilitate India achieving a GDP growth rate of over 8% in the coming years.
