NEW DELHI: The next generation GST reforms will leave more disposable income with the people, boost consumption and help inject nearly Rs 2 lakh crore in the economy, finance minister Nirmala Sitharaman said on Wednesday.Addressing a GST outreach programme in Visakhapatnam, Sitharaman said after the GST tax rate rationalisation, 99 per cent of goods under 12 per cent slab will move to 5 per cent bracket. The reforms will also result in 90 per cent of items under 28 per cent tax slab moving to 18 per cent rate.
“With this new gen tax regime, with only two slabs (5 per cent and 18 perc cent)…people will have more cash in hand,” said FM, while interacting with trade and businesses in the southern city and detailed benefits of rate rejig measure for consumption and economy. Sitharaman said the two slab rate structure will reduce burden on the people and benefit the poor and middle class.FM said several firms, including large FMCG companies, were voluntarily coming forward to announce price cuts and pass on the benefit of GST rate rationalisation to consumers before Sept 22, implementation date for new rates.
Govt has appealed to trade and industry to pass on the benefits of the GST rate cuts to consumers and several companies have already unveiled plans to do so. Authorities have said they will keep a close watch to ensure that benefits of the rate cuts are passed on to consumers.Experts expect a robust boost to consumption in the festival period. Already several automobile companies have said they expect strong demand for cars and bikes in the festival season, which begins later this month.
Impact of GCCs
Later, speaking at a GCC summit, FM said global capability centres are cementing India’s position as the world’s GCC hub by providing long-term competitive advantage to global organisations. She added that GCCs have a far-reaching impact on economic growth, competitiveness and human capital development. “India’s GCC story is a transformational journey. Today they are innovation hubs, driving research and development, generating intellectual property and patents and enabling sustainable growth for global enterprises.”
