GST Reforms Meant To Benefit People, Small Businesses, Economy: Sitharaman

(MENAFN- Live Mint) New Delhi: GST reforms, including the tax rate cuts effective 22 September, aim to benefit the poor and middle class, farmers and small businesses while boosting consumption and investments, finance minister Nirmala Sitharaman said on Thursday.

Addressing a gathering in Kolkata on next-generation GST reforms, Sitharaman said the reforms seek to simplify the tax structure, boost affordability, strengthen compliance, and stimulate industrial growth. The reforms also seek to benefit the diverse businesses, crafts and industries of West Bengal, the minister said.

The finance ministry on Wednesday notified the revamped GST rate restructure, other changes in forms and issued frequently asked questions to help businesses in implementing the reform.

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The GST Council earlier this month announced tax cuts on a wide array of daily-use and aspirational goods, ranging from packaged foods to consumer electronics as part of making the indirect tax into a mainly two-rate structure. The move was aimed at simplifying the tax system and to stimulate consumption demand.

The decisions marked the biggest overhaul of the GST regime.

Cheaper goods

Experts said the rate reduction will reduce prices of goods, boost consumption, reduce complexity and classification disputes and will go a long way to make GST a good and simple tax.

Sitharaman said the reforms are expected to inject approximately ₹2 trillion into the economy by enhancing consumption and easing the tax burden.

The GST review was carried out by reviewing the tax system from different user perspectives.

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“Will it help the poor and the middle class? - Will it support the aspirations of the middle class? - Will it benefit farmers? - Will it assist MSMEs? - For the larger economy, will it support sectors that need rapid growth, attract investments and incentivise consumption as India moves towards becoming Viksit Bharat by 2047?” the minister said, identifying the key considerations that shaped the tax reform.

“The new generation GST is not only about reducing rates and easing the burden on citizens, but also about clearing the confusion faced by businesses and making compliance simpler,” Sitharaman said.

Process reform key

Process reform is also a key feature of the new generation GST reforms that the government has introduced, she said.

The revamped GST comes into effect on the first day of Navratri, the minister said. Navratri celebrates and worships the different forms of goddess Durga.

Sitharaman explained that most goods and services now fall into primary rates of 5% for essential items and 18% for most others. Numerous essential food items, medicines, health insurance, daily-use consumer goods, household electronics, digital learning tools, and items for educational institutions have benefited from the tax relief.

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Sustainability-friendly products like composting machines also benefit from reduced GST, the minister added.

The minister said tax relief also benefits the artisans, farmers, and small entrepreneurs of Bengal, making their products more competitive in both domestic and global markets.

She reiterated that the simplified slabs and lower rates are designed not only to give relief to the citizens but also to create a predictable and fair environment for businesses, particularly MSMEs and industrialists.

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