Big GST Overhaul Coming but India not Ready for Single Rate yet, Says Sitharaman
Nirmala Sitharaman signals future shift toward simplified GST structure.
Union Finance Minister Nirmala Sitharaman announced on Thursday that India is actively working to streamline its Goods and Services Tax (GST) structure, though a single-rate system remains a future goal rather than an immediate reality. Speaking at an event in Kolkata, she emphasized that the current four-tier GST framework—5%, 12%, 18%, and 28%—was meticulously designed by aligning diverse state-level taxes, dismissing notions of arbitrary rate-setting.
Sitharaman revealed that a recent GST Council review highlighted a consensus to reduce the number of slabs but noted that members were not yet ready for a single-rate GST, stating, “The question of whether they were ready to get into one rate situation was answered with ‘not yet.’ Maybe sometime in the future.” She framed the ongoing efforts as part of “new generation GST reforms” aimed at simplifying the tax system and ensuring fairness, particularly for the poor and middle class.
Reflecting on Prime Minister Narendra Modi’s directive eight months ago to enhance GST, Sitharaman underscored the tax regime’s role as a landmark achievement in creating a unified national market by consolidating multiple central and state taxes and eliminating barriers like tolls and border posts.
She also highlighted recent efforts to reduce GST rates on common-use items, with documents detailing these changes to be shared soon. Additionally, Sitharaman circulated comparative data on tax devolution under the NDA versus the UPA government, alongside details of development projects in West Bengal, signaling a broader push for transparency and economic progress.
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