NEW DELHI: Ahead of the GST Council meeting on September 9, Union Finance Minister Nirmala Sitharaman on Thursday said that the goods and services tax (GST) rate is much below the revenue neutral rate (RNR) of 15.3%, which means less burden on taxpayers.
The current average GST rate has decreased to 12.2% as of 2023, much below the revenue neutral rate in GST, the Minister said during an event organised by the Revenue Bar Association in Chennai.
Sitharaman reiterated that revenue generation is not the primary consideration in the budget consultation process. “Revenue is the last consideration with which every budget set of meetings happen,” she stated, acknowledging that while raising revenue is essential, the priority lies in simplifying and easing compliance for taxpayers. She highlighted the extensive consultations that take place, including several meetings with the Prime Minister’s Office and direct discussions with Prime Minister Modi.
Reflecting on the journey of implementing the Goods and Services Tax (GST) during her tenure and that of her predecessors, she noted the significant efforts made between 2014 and 2019 to establish a unified taxation system under the banner of “One Nation, One Taxation.”
She underscored the importance of respecting the federal system and fostering collaboration between the central and state governments to enhance revenue generation without burdening taxpayers. “Both the centre and the states can work together in developmental activities and also in widening the tax base,” she asserted.