CHENNAI: Union Finance Minister Nirmala Sitharaman on Sunday said over 90% of items in the 18% GST slab and 99% of goods in the 12% slab have been shifted to the 5% bracket under the recent tax reforms. She added that moving towards a two-slab system of 5% and 18%, along with reducing tax rates on a majority of items, would positively impact all 140 crore Indians. She was speaking at Tax Reforms for Rising Bharat, an event organised by the Joint Conclave of Trade and Industries Association.
Though Prime Minister Narendra Modi had earlier announced that the reforms would be rolled out before Deepavali, the council decided to implement them earlier to coincide with festivals like Navaratri, when consumption is high, she said. Calling it "an immediate and direct victory for every Indian," Sitharaman added that the reforms have simplified the system and reduced the tax burden.
The union minister said GST registrations had more than doubled from 65 lakh in 2017 to 1.5 crore now. "This shows it is not the 'Gabbar Singh Tax' as described by the opposition leader. Registrations will only increase as it is a simple and uniform tax system across the country," she said. Gross GST collections, Sitharaman added, had risen from Rs 7.19 lakh crore in 2017 to Rs 22 lakh crore now, with the centre retaining only 23% of the revenue and the rest devolved to the states.
On criticism that GST was being driven solely by the union government, Sitharaman stressed that the reforms were the outcome of deliberations in the GST Council. "PM Modi and I were often blamed if there were problems in implementation. But I want to give credit to the GST Council, in which all state finance ministers are members. Together, we have reduced rates for over 350 items, adopted a two-slab system, and simplified registration, which can now be completed within three days," she said.
The union minister added that classification had been streamlined with similar goods grouped under the same tax slab and assured that GST would continue to evolve based on stakeholder feedback.
Speaking at the event, BJP state president Nainar Nagenthran urged traders to display boards showing product prices before and after GST reduction. Tamil Nadu Vanigar Sangangalin Peramaippu president AM Vikramaraja appealed to the minister to form a committee of trade organisations and convene meetings every three or six months to address issues such as harassment of traders by GST officials. Industry representatives welcomed the reforms while raising a few concerns to be addressed by the government.