FM Nirmala Sitharaman stated that the GST rate reduction would boost economic expansion and counteract the negative effects of the US tariff increase on Indian exports.
She added that since crude was the most expensive item on India’s import bill, the country will keep purchasing Russian oil for economic reasons.
In a media interview, Sitharaman stated that the government’s primary focus would now be on making sure that the GST rate reductions on a variety of goods and services, which will take effect on September 22, are passed on to customers.
“After September 22, we have a lot of work to do. We are certain that the average person would profit from this significant exercise in vigilance,” the finance minister said.
Additionally, FM Sitharaman stated that all industry leaders supported lowering product costs so that consumers may benefit from the GST rate fall and that the government was communicating with various stakeholders and parties to monitor the rate reduction.
The Minister of Finance stated, “After the GST Council decided to cut GST rates, MPs are also taking up the responsibility of monitoring the rate reduction on the ground.”
The cost of most products and services will be reduced by the two-slab GST system, which features rates of 5% and 18%, replacing the previous rates of 12% and 28%.
Simultaneously, a 40% tax on luxury and sinful items, including tobacco, pan masala, aerated beverages, expensive automobiles, yachts, and private planes, ensures equity and revenue balance.
Additionally, the burden on businesses—particularly MSMEs and startups—has been lessened by the simplification of registration and return filing, the speed at which refunds are processed, and the reduction of compliance expenses.
Sitharaman added that she had been contacted eight months prior by Prime Minister Narendra Modi to discuss ways to update the GST system.
She noted that PM Modi had emphasized the need to streamline the system with a particular emphasis on reducing the burden on the middle class. She also said that GST 2.0 was created to reduce disagreements and guarantee clarity for states and enterprises alike.