Have GST reforms truly lessened the tax burden on citizens?
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Synopsis
Discover how recent GST reforms, hailed by Union Finance Minister Nirmala Sitharaman, aim to reduce the tax burden on the general public. The simplification from a four-tier to a two-slab system is expected to benefit all 1.4 billion Indians, just in time for the festive season. Will this reform make a significant impact?
Key Takeaways
- GST reforms simplify the tax structure.
- New slabs are 5 percent and 18 percent.
- Tax on some essentials reduced to zero.
- Special 40 percent tax on harmful goods.
- Effective date is September 22.
Chennai, Sep 14 (NationPress) Union Finance Minister Nirmala Sitharaman stated on Sunday that the Goods and Services Tax (GST) reforms have lessened the tax burden on citizens.
While speaking at the Joint Conclave of Trade and Industries Association event titled 'Tax Reforms for Rising Bharat' in Chennai, she detailed that the previous four-tier GST framework has now been streamlined into just two slabs.
"Previously, GST was divided into four categories. Now, we have condensed it to two slabs - 5 percent and 18 percent. Many items that were taxed at 12 percent and 18 percent have been transitioned to the lower 5 percent category. Certain essential goods have had their tax reduced to zero. This reform is poised to significantly benefit all 1.4 billion Indians," FM Sitharaman remarked.
This overhaul, the most significant since the introduction of GST in 2017, will replace the existing 5 percent, 12 percent, 18 percent, and 28 percent structure with just two rates - 5 percent and 18 percent.
Moreover, a special 40 percent tax rate has been introduced for goods deemed harmful or excessively luxurious, including cigarettes, tobacco, pan masala, soft drinks, and high-end luxury vehicles.
Prime Minister Narendra Modi had alluded to this transition during his Independence Day speech from the Red Fort, emphasizing the government's commitment to alleviating the burden on the common man ahead of the festive season.
The revised rates are set to take effect on September 22, just in time for Diwali.
Government officials indicated that the timing of this announcement was intentional, considering the significant festivals across various regions.
While Diwali drives demand for clothing and household items in the south, Navratri and Durga Puja stimulate purchases in the north. The GST Council, which includes representatives from all states and Union Territories, unanimously endorsed these reforms.
The government anticipates that the simplified structure will promptly reduce essential goods prices, stimulate consumption, and enhance economic activity.
Describing it as a collective triumph, she stated, "This is not merely a tax reduction - it is a victory for each citizen."
Point of View
These GST reforms represent a strategic move by the government to alleviate financial pressures on citizens, particularly as the festive season approaches. While the simplification of the tax structure is commendable, it will be crucial to monitor its real-world impact on consumer prices and economic activity.
NationPress
03/11/2025
Frequently Asked Questions
What are the new GST slabs introduced?
The new GST structure simplifies the rates to just two slabs: 5 percent and 18 percent.
When will the new GST rates take effect?
The revised GST rates will come into effect on September 22, ahead of Diwali.
What items will see a tax reduction?
Many items previously taxed at 12 percent and 18 percent have been moved to the lower 5 percent bracket, with certain essentials seeing a tax reduction to zero.
What is the special tax rate introduced?
A special 40 percent tax bracket has been introduced for items considered harmful or excessively luxurious, such as cigarettes and luxury cars.
How will these reforms benefit citizens?
The reforms are expected to lower prices of essential goods, spur consumption, and enhance economic activity, benefiting all citizens.
