In her budget speech, Finance Minister Nirmala Sitharaman has announced that GST rates will be reduced further and that tax rationalisation is now in its final stage. She stressed that the Revenue Neutral Rate (RNR) has come down significantly from 15.8% in 2017 to 11.4% in 2023 and is expected to come down further.
The GST Council, headed by Sitharaman and including state finance ministers, set up a Group of Ministers (GoM) in 2021 to recommend changes in GST slabs. This committee of six state finance ministers is responsible for making the GST framework simpler.
Almost done with GST Rate Cut
At The Economic Times Awards, when asked whether the time has come to rationalize GST rates, Sitharaman said, “That work has almost reached a finale.” She also said that the GoM has made an excellent job, but she is reviewing all the recommendations herself before submitting them to the GST Council for the final decision.
The minister said that important issues of tax reduction and rationalisation are under consideration and will be considered at the next council meeting. She promised that the government is almost done with making the final decision on these changes.
As the debates regarding GST rate cuts persist, the stakeholders are eagerly waiting for the clarity on the new tax slabs and their implications for businesses and consumers.
