Union Finance Minister Nirmala Sitharaman on Sunday said that the GST reforms are a huge victory for each and every citizen of the country
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CHENNAI — Union Finance Minister Nirmala Sitharaman on Sunday said that the GST reforms are a huge victory for each and every citizen of the country.
Taking into account that every state in India has its own festivals, it has been decided to implement the GST reforms much ahead of Prime Minister Narendra Modi's instruction of launching them before Deepavali festival, Sitharaman said at an event in Chennai.
In her address at the joint conclave of the trade and industries association on "Tax Reforms for Rising Bharat' organised by Chennai Citizens Forum, she said the beneficial impact of Goods and Services Tax would be there for all products from the start of the day till people go to bed.
Explaining some of the key initiatives, Sitharaman said 99 per cent of all the goods which were earlier taxed 12 per cent under GST have now been reduced to 5 per cent.
The latest set of GST reforms are set to come into force from September 22.
Also read: GST reforms a landmark relief for auto industry — Piyush Goyal
Noting that the GST Council has reduced the tax rates for over 350 items, she pointed out that the Centre has introduced only 5 and 28 per cent slabs instead of the earlier practice of levying taxes under different slabs.
"We have also simplified the procedure for the traders also. There is no 28 per cent GST tax on any product," she remarked.
Referring to the increase in tax base from traders, she said before the GST was introduced in 2017, there were only 66 lakh traders who used to file their taxes. But today, 1.5 crore businesses have come under the GST fold in the last 8 years.
She said, "Opposition party leader Rahul Gandhi had termed the GST a Gabbar Singh Tax, but after the GST was introduced, the number of businesses which were paying taxes has been increased to 1.5 crore in the last 8 years as they realised that they would be able to benefit from it".
"This number of 1.5 crore traders filing GST over the last 8 years, will further increase in the future," she said, and added that because of that increase, the revenue to the Central and state governments has increased.
"In 2017, the tax collected was INR 7.19 lakh crore and now the Gross GST collection has crossed INR 22 lakh crore. On an average, INR 1.8 lakh to 2 lakh crore revenue is collected by the Central and state governments. For example, the amount INR 1.80 lakh crore gross revenue is divided into half in which the states get INR 90,000 crore and Centre gets INR 90,000 crore. Even from that INR 90,000 crore revenue from the Centre’s portion, around 41 per cent goes back to the states,” she said.
“From this, we can understand that public and the state government stand to benefit through the implementation of the GST”, she added.
On the classification issue pointed out by some traders before the GST reforms were introduced, Sitharaman, citing an example said, for the sale of popcorn there has been a classification. If salted popcorn is sold, a tax of 5 per cent will be collected if it is sold as ‘Namkeen’ category while for a sweetened popcorn, a tax of 18 per cent was levied.
“There are no taxes on popcorn sold on the roadside. But however, when the same popcorn is branded and produced in a factory, this classification comes into effect. But, in the latest GST reforms, it has been simplified. Now, all food products come under 5 per cent slab or no tax has been levied. So, there is no problem of classification anymore. This popcorn is an example for you all to understand,” she said.
Sitharaman said to expedite the PM’s vision of Viksit Bharat, these kind of measures have been taken.
“I expect people should welcome this move. In fact, a lot of companies like Hindustan Unilever Ltd, Godrej have assured me that they will pass on the benefit to the public,” she said.
The union minister on the occasion also released a book in English and Tamil that showcases the benefits Tamil Nadu stands to get following the implementation of the GST reforms.
“What was the earlier taxation and what is the new taxation and how Tamil Nadu will benefit from this GST reforms? It has been clearly mentioned here and I urge you all to read the book which is available in both English and Tamil languages,” she said addressing the audience present at the venue.