Visakhapatnam, Sep 17: Finance Minister Nirmala Sitharaman on Wednesday said that the reduction in tax rates on goods and services as part of the GST 2.0 reforms would result in a saving of Rs 2 lakh crore for consumers, leaving more money in the hands of the common people for savings or discretionary spending.
In her address at the Outreach and Interaction Programme on Next Gen GST Reforms, the Finance Minister said the GST Council’s decision is aimed at easing the tax burden on consumers and improving liquidity in the economy.
She said that 99 per cent of the goods have now come under the 5 per cent GST slab, which will be very beneficial for the middle class and the poor. The latest reforms mark a major simplification of the GST structure. The shift to a two-slab system of 5 per cent and 18 per cent, removing the earlier 12 per cent and 28 per cent rates, has resulted in lower taxes and made the structure more transparent and easier to follow.
She further highlighted that the reforms will boost farmers’ incomes, as well, by lowering taxes on agricultural-related goods, promoting farm modernisation.
The Finance Minister said MSME and job-creating sectors will also benefit through reduced costs, providing enhanced opportunities. She added that the GST reforms will enhance the purchasing power and contribute to the savings of the common man across the country.
Sitharaman also highlighted that GST revenues have shot up from Rs 7.19 lakh crore in 2018 to Rs 22.08 lakh crore in 2025, while the number of entities that pay tax has more than doubled to 1.51 crore from 65 lakh earlier.
She said far-reaching changes reinforce Prime Minister Narendra Modi’s vision and dream of achieving Viksit Bharat and Atmanirbhar Bharat. Effective from September 22, the GST reforms simplify the tax structure and support economic growth. The Finance Minister expressed confidence that the historic tax overhaul will empower every citizen and strengthen India’s economy.
IANS