‘The expectation is that GST rates will come down and we are working on it’: FM Nirmala Sitharaman

In an exclusive interview with Financial Express, Finance Minister Nirmala Sitharaman has indicated that a simplified GST is in the works for lowering the rates.

FM Nirmala Sitharaman hints at lowering GST

Sitharaman said, “The time has come for getting some consensus in the GST Council and coming up with a very simplified and easy-to-comply GST. We will be doing it.”

“There is a lot of work happening in this regard,” she revealed. “After the budget, I have spent a lot of time going into every item, looking at the rates at which they are, looking at the inversion which has come in, the layered way in which taxes are levied and so on.”

The Finance Minister further explained that, “The expectation is that it (GST rates) will come down, and we are working on it.  Revenue buoyancy will rise if the rates are low enough, and that leads to an expansion.”

According to Sitharaman, the “GST is a well-laid-out system, where items in the VAT regime were brought in, and this (items included under GST may not need to change).”

However, there is still no clarity on the dates for the much-awaited 56th GST Council Meeting expected to be held in early July.

In the interview, the Finance Minister has strongly rejected the “tariff king” label often attributed to India. She said the country’s tariff structure is largely liberal and compliant with global norms.

She clarified that India’s effective tariff rates are far below the upper bounds set by the World Trade Organisation (WTO), with customs revenues accounting for just about 4 per cent of the total value of imported goods.

“We have only eight customs duties, including zero tariff rates. There have been significant tariff reductions in both the July and February budgets,” she said, also adding that such a tariff framework does not justify India being branded a "tariff king."

She further said that tariff rationalisation is country-specific and sectoral issues, such as those concerning agriculture, dairy, and the automobile industry, are being addressed in trade negotiations.

Nirmala Sitharaman credited Commerce Minister Piyush Goyal for maintaining a consistent dialogue with stakeholders before, during, and after trade talks.

Also read: “Ever wished your next bus ride could take off?” Deepinder Goyal launches LAT Aerospace with former employee (startuppedia.in)