New GST Structure To Spur Demand, Support Economic Growth: FM Sitharaman

(MENAFN- KNN India) New Delhi, Sep 8 (KNN) Finance Minister Nirmala Sitharaman on Friday said the newly announced dual-slab Goods and Services Tax (GST) structure marks a 'next-generation' step in indirect taxation and is expected to deliver a significant boost to the Indian economy.

The simplified GST regime, effective September 22, introduces two primary rates of 5 percent and 18 percent, while select sin and luxury goods will attract a 40 percent levy.

“It will have a very positive impact on the Indian economy and its growth numbers because this affects every one of the 1.4 billion people,” Sitharaman said in an interview, noting that the industry had committed to passing on the benefits of lower rates to consumers.

India's economy grew 7.8 percent in the June quarter, a five-quarter high, but faces pressure fr0m higher US tariffs.

Sitharaman stressed that while GST reforms were not designed specifically to counter tariff-related disruptions, they could indirectly cushion the impact by spurring demand.

The minister confirmed that the government is preparing a relief package for sectors affected by US tariffs.

“Sectors which are hit by tariffs... would have approached their respective ministries. The respective ministries, in turn, are working to come up with the package,” she said, without specifying a timeline.

On foreign investment norms under Press Note 3-which requires prior government approval for investments fr0m neighbouring countries such as China-Sitharaman said discussions were ongoing.

She added that some flexibility has already been provided in areas like renewables, particularly for domain exports required for on-ground projects.

On the rupee's weakness, she clarified that depreciation was mainly against the US dollar, and that the Reserve Bank of India was taking appropriate action.

(KNN Bureau)

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