In a significant display of cooperative federalism, Union Finance Minister Nirmala Sitharaman has lauded state finance ministers for their pivotal role in approving a landmark overhaul of India’s Goods and Services Tax (GST) regime, set to take effect on September 22, 2025.

In a letter sent on September 5, Sitharaman expressed gratitude to her state counterparts for their constructive participation in the GST Council meeting on September 3, where a unanimous decision was reached to simplify tax slabs, reducing rates on a wide range of products—from butter and chocolates to shampoos, tractors, and air conditioners—for the benefit of the common man. Speaking to PTI, she described the Council’s work as “remarkable,” highlighting the consensus achieved despite initial concerns over potential revenue losses.

The GST Council, chaired by Sitharaman and comprising representatives from all states and Union Territories, streamlined the tax structure by eliminating the 12% and 28% slabs, classifying most goods under 5% for essentials and 18% for others. Originally planned as a two-day deliberation, the Council finalized the decision in a single, marathon session, reflecting a shared commitment to public welfare.

Sitharaman noted that states, while cautious about revenue impacts, supported the rate cuts after recognizing their potential to boost consumer spending and offset losses. “For the sake of the people of India, please,” she appealed during discussions, emphasizing that both the Centre and states would navigate the fiscal impact together.

Sitharaman underscored the inclusive nature of the GST Council’s deliberations, where every member’s input was thoroughly debated, and additional comments were welcomed to ensure a robust consensus. Addressing a press conference post-meeting, she reiterated her appreciation for the states’ collaborative spirit in driving one of India’s most significant tax reforms. The minister’s letter to state finance ministers reinforced this sentiment, celebrating their ability to rise above intense discussions for a “good cause.”

As India prepares for the implementation of the revised GST framework, this overhaul is poised to enhance affordability and stimulate economic activity nationwide.

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