Finance Minister Nirmala Sitharaman on Wednesday told a Group of Ministers that the rate rejig in GST reforms will provide relief to common man, farmers, middle class and MSMEs.
These “next generation GST reforms” are aimed at making India Aatmanirbhar, she told to the GoM during a meeting, adding that the Centre committed to building broad-based consensus with states on next-gen GST reforms.
“The next-gen GST stands on three pillars of structural reforms, rate rationalisation and ease of living,” Sitharaman said during a meeting with the GoM.
During the meeting with GoMs on GST rate rationalisation, insurance taxation and compensation cess, Sitharaman “emphasised that the proposal by the Central Government is with a vision to usher in the next generation of GST reforms in India’s journey towards becoming #AtmanirbharBharat.”
Consensus with states
During her meeting, Nirmala Sitharaman maintained that the Centre will maintain a consensus with states to implement the GST rate rejigs in reforms
The finance ministry in a post on X said that the same will be done in the coming weeks.
“The Central Government remains committed to building a broad-based consensus with the States in the coming weeks to implement the next generation of GST reforms in the spirit of cooperative federalism,” it said.
The finance minister’s address to the GoMs was for about 20 minutes during which she elaborated on the Centre’s proposal on reforms in GST rate rejigs.
Over the next two days, the three GoMs will deliberate on the Centre’s ‘next-gen’ GST reforms where it has been proposed to do away with multiple GST slabs and brig most goods under the 5 and 18 per cent rates. A special 40 per cent rate has been proposed on 5-7 items, including sin goods.
The GoM on GST rate rationalisation is scheduled to meet again on August 21.
As per an SBI Research report, the GST proposal, if implemented, could result in revenue loss of about ₹85,000 crore a year. For the current fiscal, the loss to revenue is estimated at ₹45,000 crore assuming the new tax rates are implemented from October 1.
The Centre’s proposal once approved by the GoMs will be placed before the GST Council, comprising ministers from Centre and all states, in its meeting next month. Prime Minister Narendra Modi has announced rollout of the GST reforms by Diwali.
