NEW DELHI: The GST reforms, which kicked in from Monday, are going to benefit the poor, the middle class, the new middle class, the youth, kisan, women, shopkeepers and udhyami (entrepreneurs), Finance Minister Nirmala Sitharaman has said.
The rate rationalisation (5 per cent and 18 per cent) will not only support local manufacturing but also bring cooperative federalism.
“We should all work to accelerate growth, make it easy for business to function and be attractive for investment. Such a big tax reform became possible by taking all states together, since 2017,” said the finance minister, citing Prime Minister Narendra Modi’s address to the nation on Sunday.
“PM Modi’s address to the nation had several messages. Unfortunate, that despite a positive and direction-setting address, our opposition party and its SM (social media) eco-system spread negativity and baseless criticism,” she noted in a post on X.
According to her, the GST reforms have reduced the tax burden on people.
Items that were taxed at 12 per cent and 18 per cent have largely been moved to the lower 5 per cent bracket. For certain essentials, tax has been reduced to zero. This reform will significantly benefit all 1.4 billion Indians.
Additionally, a special 40 per cent tax bracket has been introduced for goods considered harmful or excessively luxurious, including cigarettes, tobacco, pan masala, soft drinks and high-end luxury cars.
The GST Council, with representatives from all states and union territories, unanimously approved the reforms.
The Centre expects the simplified structure to immediately bring down prices of essential goods, spur consumption and boost economic activity.
According to the Prime Minister, nearly 99 per cent of products earlier taxed at 12 per cent have now been moved into the 5 per cent category. He underlined that this reform would make essential and lifestyle goods -- from groceries and medicines to TVs, refrigerators, two-wheelers, cars, and even hotel stays -- more affordable for citizens.