Very close to decision on reducing GST rates & slabs: Nirmala Sitharaman
New Delhi, Mar 8, 2025
Speaking on the ongoing efforts to simplify the GST structure, Nirmala Sitharaman said, 'We are very close to closing in on a final call on the reduction in GST rates and slabs'
Finance Minister Nirmala Sitharaman has provided a key update on the government's ongoing efforts to simplify the Goods and Services Tax (GST) structure.
Speaking at the ET Awards event, she said that a final decision on rate reductions and tax slab rationalisation is "very close". The Finance Minister added that the government is on the verge of concluding its stance on these changes.
Addressing stakeholders' concerns, Sitharaman acknowledged feedback suggesting that GST reforms had not been given enough time to stabilise. "We received feedback that the system wasn’t allowed to settle, which led to some discouragement," she said, adding that she is personally reviewing the work of GST groups to ensure reforms align with the country’s best interests.
She also highlighted the progress made since the introduction of GST, noting that the Revenue Neutral Rate (RNR), which was initially set at 15.8 per cent, had dropped to 11.4 per cent by 2023. Dismissing concerns that GST had made goods and services more expensive, Sitharaman challenged critics to identify any items where rates had increased post-implementation.
Responding to a question at the event, she said, "Now, at this stage, there is one more look that I would (take) the groups (GoM) have done excellent work, but I still have taken it upon myself to, once more, completely review each of the groups' works, and then probably take it to take it to the Council to see if we can come to a final conclusion on this."
Meanwhile, when asked a question on the reasons for stock market volatility and how the path towards more calm markets playing out, Sitharaman said, "It is like asking will the world be calm, will the wars come to an end, will the Red Sea be safer, will there be no sea pirates. Can I comment on it or any of you can comment".
GST rate reduction and future plans
The Finance Minister indicated that further reductions in GST rates are expected, reinforcing the government's commitment to making taxation more consumer- and business-friendly. "If 15.8 per cent has already come down to 11.4 per cent, it is only going to reduce further," she added.
The Union minister further assured that she is meticulously reviewing all GST-related proposals before presenting them to the GST Council for a final decision.
The move is expected to bring relief to businesses and consumers, as lower GST rates could lead to reduced costs on goods and services. Notably, the GST Council has been working on rationalising the tax structure, aiming to reduce complexity and improve compliance. The anticipated changes are likely to impact multiple sectors and contribute to economic growth.
In recent years, significant GST reductions have been implemented in sectors such as healthcare (cancer drugs) and environmentally-friendly technologies (electric vehicles). These reductions have been part of broader efforts to make essential goods and services more affordable for consumers.
Meanwhile, when asked a question on the reasons for stock market volatility and how the path towards more calm markets playing out, Sitharaman said, "It is like asking will the world be calm, will the wars come to an end, will the Red Sea be safer, will there be no sea pirates. Can I comment on it or any of you can comment".
[The Business Standard]
