A notable announcement comes with Finance Minister Nirmala Sitharaman on Saturday, that Goods and Services Tax (GST) rates will further be brought down a notch, signifying potential relief for businesses and consumers alike.
She emphasized that long overdue rationalization of tax rates and slabs is at the final stages, which hints at a major overhaul in the indirect tax structure of the country.
Declining Revenue Neutral Rate Signals Positive Change
Ranging from 15.8%-11.4%, RNR has registered a continuous decline since the implementation of GST on July 1, 2017. Sitharaman stated this rate would be “even lower”, suggesting a further taxpayer-friendly regime in the future.
GST Council’s Push for Rationalization
During her tenure, Sitharaman set up a Group of Ministers (GoM) in Sept 2021 with a mandate to examine the existing tax structure and propose reforms for future change. The process of rate rationalization is almost complete as per Finance Minister’s speech while addressing audience during the ‘The Economic Times Awards.’
She has reaffirmed the hard work of GoM but added that one last review is still pending before the Chief Executive presents its recommendations to the Council. “We are very close to taking a final decision on critical aspects like rate cuts, slab rationalization, and the number of tax brackets,” she added.
What’s Next for GST?
With the final GST Council meeting on the horizon, businesses and taxpayers can expect simplified tax slabs and reduced rates, fostering ease of compliance and economic growth. As the government moves closer to a decision, stakeholders remain hopeful for a more streamlined and efficient tax system.
