"GST cut is the manifesto of 1.4 billion Indians"

Finance Minister Nirmala Sitharaman on GST rate cuts, lessons from Covid-19, and more

- BY TEAM BT

Nirmala Sitharaman stands as a pillar in India's economic leadership, being the country's first Union Finance Minister to have presented eight consecutive Budgets. Her stewardship has been marked by resilience, vision, and transformative policy-making in the face of unprecedented challenges, including to the Covid-19 pandemic. Soon after the GST (goods and services tax) Council meeting, the finance minister attended an India Today Group multi-city townhall on the GST reforms. Edited excerpts of the interaction moderated by Sweta Singh and Marya Shakil:

SINGH: Is GST finally a good and simple tax?

A: Absolutely, it is good and it is simple, no doubt. Because before GST came, every state had its own laws—excise duty, value-added tax (VAT), some state-level cesses, some local taxes. All such taxes were brought together to form the GST. At that time, [pre-GST] each state had a rate for an item; while implementing GST, the rate for any one item pre-GST was kept in mind and, during the introduction of GST, the rate was fixed with only a little movement to one side or the other. So, no pre-GST rate was too far away from the rate fixed under GST. That is why GST rates were kept close to earlier ones: an item near 5% pre-GST (whether 4%, 5% or 6%) went to 5%; if it was near the 12% rate (10%, 12%, 13%, 14%), it came to 12%, and so on. Today, I am surprised when the Opposition says that while implementing GST you kept the rates high, and now in the name of reform you’ve lowered them.

Those rates were not our freewill rates. We brought in whatever existed before.

SHAKIL: The Opposition also claims the changes are eight years too late. The timing, as always, is being questioned.