Synopsis
Union Finance Minister Nirmala Sitharaman confirmed a forthcoming reduction in GST rates as the rationalization of tax slabs nears completion. Meanwhile, Congress demands a complete overhaul of the GST system, advocating for a simpler tax framework.Key Takeaways
- Further reduction of GST rates is imminent.
- The revenue neutral rate has decreased from 15.8% to 11.4% since GST's inception.
- GST Council is nearing a final decision on rationalizing tax slabs.
- Congress advocates for a complete reform of the GST system.
- Global uncertainties are impacting stock market stability.
New Delhi, March 9 (NationPress) Union Finance Minister Nirmala Sitharaman has announced that Goods and Services Tax (GST) rates will be further decreased as the process of streamlining tax slabs approaches its conclusion.
FM Sitharaman noted that the revenue neutral rate (RNR), which was 15.8 percent when GST was introduced in July 2017, has decreased to 11.4 percent in 2023 and is expected to decline further.
While addressing a media gathering in the national capital, FM Sitharaman stated that initiatives to simplify GST slabs are nearly complete. The GST Council, led by the Finance Minister and comprising state finance ministers, is anticipated to reach a final decision shortly.
“At this point, I will review the work done by the groups (GoM). They have performed exceptionally well, but I feel it is necessary to conduct a thorough review of each group's outputs before presenting them to the Council for a final decision,” the Finance Minister remarked.
The GoM was established in September 2021 to propose modifications to GST rates and slabs. This committee includes finance ministers from six states and has been dedicated to enhancing the efficiency of the tax system.
The rationalisation process involves reducing the number of tax slabs, streamlining rates, and addressing significant concerns raised by various industries.
The Union Minister highlighted that a final review is in progress before the proposal is submitted at the upcoming GST Council meeting.
“We will present it at the next council meeting. We are very close to making final decisions on critical issues, such as rate reductions and the number of slabs,” FM Sitharaman stated.
In contrast, the Congress party has called for a comprehensive overhaul of the GST system, asserting that simply reducing rates is insufficient.
Congress leader Jairam Ramesh emphasized that the government should aim for a simpler and less punitive GST system rather than merely reducing tax rates on specific items.
He noted that the party had proposed a 'GST 2.0' in its 2024 Lok Sabha election manifesto, which aims to create a tax system that is genuinely “Good and Simple.”
The Congress party remains dedicated to this vision.
When questioned about stock market fluctuations, the finance minister attributed them to global uncertainties, including wars, disruptions in the Red Sea, and piracy threats.
FM Sitharaman mentioned that forecasting complete stability in the markets is challenging due to these unpredictable global factors.
Regarding the government's strategies for public sector banks, the Union Minister stated that efforts are underway to increase public shareholding.
The objective is to involve more retail investors in public sector banks, thereby enhancing public participation in the banking sector.
Concerning the India-US trade agreement, the Finance Minister indicated that both nations are striving for a mutually advantageous deal.
FM Sitharaman also underscored that India is actively negotiating with the European Union and the UK, ensuring that national interests remain a top priority.
