GST rate reduction has lightened tax burden, says Sitharaman
The Finance Minister said the reforms were announced in time for the festive season to benefit households across regions
Nirmala Sitharaman (PTI)
CHENNAI: Union Finance Minister Nirmala Sitharaman on Sunday said that the reduction in Goods and Services Tax (GST) rates has significantly eased the tax burden on people and strengthened state revenues.
Speaking at the ‘Tax Reforms for Rising Bharat’ conclave in Mylapore here, Sitharaman said Prime Minister Narendra Modi had entrusted her with the responsibility of explaining GST when it was introduced in 2017. "Back then, the GST regime had four tax slabs. Today, we have simplified it to two, 5% and 18%. Nearly 90% of goods that earlier attracted 18% have been reduced to 5% or exempted altogether. Some items have been brought down to zero tax. This has eased the tax load on 140 crore citizens and is a collective victory for the people and the states," she said.
The Finance Minister said the reforms were announced in time for the festive season to benefit households across regions. "In southern states, people spend on new clothes and essentials during Deepavali, while in northern states, shopping surges ahead of Navratri and Durga Puja. Keeping all festivals in mind, the GST Council announced the changes early," she said.
Highlighting the growth of compliance, Sitharaman said the number of GST payers has increased from 65 lakh in 2017 to 1.5 crore today. Gross GST collections rose from Rs 7.18 lakh crore in 2018 to Rs 22.08 lakh crore. "This reform has benefited both citizens and state governments, with ministers from all states being part of the GST Council since its inception," she added.
Sitharaman said the reforms were guided by five principles: supporting the poor, middle class, farmers and MSMEs, and accelerating national growth. She urged companies to pass on the benefits to consumers, adding, "This is not just a tax reform—it is a step towards building a developed India."
Industry representatives welcomed the move. CII Tamil Nadu chairman Unnikrishnan said the reforms would benefit the auto sector and strengthen compliance. IIT Madras director V Kamakoti said the changes, particularly tax exemptions for higher education research, would help poor and middle-class families while promoting sustainable development.
BJP state president Nainar Nagenthran praised the reform as "a commendable step by Prime Minister Modi" and urged traders' associations to display boards showing reduced GST rates to ensure transparency.