'American tariff hike will be countered...', said Finance Minister Nirmala Sitharaman on GST rate cut

Nirmala Sitharaman on GST Reforms: Finance Minister Nirmala Sitharaman said on Friday that the reduction in Goods and Services Tax (GST) rates will strengthen the country's economy. These new rates will be implemented from September 22. She said that the main objective of this decision is to increase domestic demand and provide relief to the common people.

Nirmala Sitharaman on GST Reforms: Benefits will reach consumers

The Finance Minister said that the government will now focus on ensuring that the consumers get the direct benefit of the rate cut. For this, the government will monitor and ensure that traders and companies reduce the prices of goods and services. He also said that all industry organizations agree that the general public should get the benefit of this.

Sitharaman on GST Reforms: MPs will play the role of ground monitoring

Sitharaman said that after the reduction in GST rates, MPs have been given the responsibility to visit their respective areas and see whether the consumers are getting the benefit or not. This will be a vigilance campaign in which the government is fully engaged.

GST Reforms: India will continue to buy oil from Russia

On the question of oil import from Russia, the Finance Minister clarified that India will continue to buy oil keeping in mind its economic needs. He said that crude oil is the most expensive import for India and it is purchased in foreign currency. Therefore, it is important for India to buy oil from wherever it gets it at cheaper rates, even if it is Russia.

Impact of US tariffs and solutions

The Finance Minister also said that the 50 percent import duty imposed by the US will definitely affect India's exports, but the reduction in GST rates will increase domestic demand and this will compensate for that impact. Also, the government will also take steps to help the traders affected by the tariff.

GST 2.0 : Simple and clear tax system

Sitharaman said that Prime Minister Narendra Modi had asked her about eight months ago to consider reforms to make the GST system simpler and more transparent. Under this, a new two-tier tax system will now be implemented - with rates of 5% and 18%. The earlier rates of 12% and 28% are being removed, which will reduce the prices of most goods and services.

40% tax on luxury and harmful goods

The Finance Minister also said that luxury items like pan masala, tobacco, expensive cars, yachts, private planes will now be taxed up to 40%. This will maintain balance in the tax system and there will be no reduction in revenue.

Relief to MSME and Startup

The government has simplified the registration process, made filing of returns easier and refunds will also be available faster. This will provide great relief especially to small and medium businesses (MSME) and startups and will also reduce their compliance costs.