GST Rationalisation to Benefit Poor, Middle Class, and Entrepreneurs: FM Sitharaman

New Delhi – Finance Minister Nirmala Sitharaman has said that the GST reforms implemented from Monday will benefit a wide range of people, including the poor, middle class, new middle class, youth, farmers, women, shopkeepers, and entrepreneurs.

The rate rationalisation, focusing on 5 per cent and 18 per cent slabs, is expected to support local manufacturing while promoting cooperative federalism.

“We should all work to accelerate growth, make it easier for businesses to operate, and create an attractive investment environment. This major tax reform became possible because all states worked together since 2017,” Sitharaman said, referring to Prime Minister Narendra Modi’s address to the nation on Sunday.

She noted in a post on X that, “PM Modi’s address had several positive and direction-setting messages. Unfortunately, despite this, the opposition and its social media ecosystem spread negativity and baseless criticism.”

The finance minister explained that the GST reforms have reduced the tax burden for citizens. Products previously taxed at 12 per cent and 18 per cent have largely been moved to the 5 per cent bracket, while certain essential items have been made tax-free. This move is expected to benefit all 1.4 billion Indians.

Additionally, a special 40 per cent tax rate has been introduced for goods considered harmful or excessively luxurious, including cigarettes, tobacco, pan masala, soft drinks, and high-end luxury cars.

The GST Council, comprising representatives from all states and union territories, unanimously approved the reforms.

The Centre expects that the simplified GST structure will immediately reduce prices of essential goods, boost consumption, and stimulate economic activity.

According to the Prime Minister, nearly 99 per cent of products previously taxed at 12 per cent have now moved into the 5 per cent category. He emphasized that the reform would make essential and lifestyle goods – from groceries and medicines to TVs, refrigerators, two-wheelers, cars, and even hotel stays – more affordable for citizens.

With inputs from IANS