New Delhi, Sep 5 (IANS) Finance Minister Nirmala Sitharaman said on Friday that the GST rate cut would spur growth in the economy which would offset the drag due to the adverse impact of the US tariff hike on Indian exports. She also said that India would continue to buy Russian oil because of economic considerations as crude was the costliest item in the country’s import bill.
The government’s main focus would now be on ensuring that the GST rate cuts on various goods and services, that will kick in from Sept 22, are passed on to consumers, " Sitharaman said in a media interview.
“We have a lot of work post-22nd September. It is a big vigilance exercise and we are confident the benefits will reach the common man, " the Finance Minister noted.
FM Sitharaman also said the government was speaking to different stakeholders and parties to monitor rate reduction and all industry leaders were on board for lowering prices on goods to pass on the benefit of the GST rate cut to consumers.
The Finance Minister said, "After the GST Council's decision to cut GST rates, MPs are also taking up the responsibility of monitoring the rate reduction on the ground."
On the issue of western pressure on India to stop buying oil from Russia, the Finance Minister said the government’s purchases of oil were based on economic considerations such as the price and logistics costs. She pointed out that “since oil is a big ticket foreign exchange-related item and the costliest item in India’s import bill, we will undoubtedly be buying Russian oil."
On the impact of the USA’s 50 per cent punitive tariff on the Indian economy, the Finance Minister said that the cut in GST rates would drive up domestic demand and spur growth which would offset the adverse impact on exports. She also said that the government would come out with measures to support those who have been hit by the tariff hike.
The two-slab GST system of 5 per cent and 18 per cent, removing the earlier 12 per cent and 28 per cent rates, will reduce the prices of most goods and services. At the same time, a 40 per cent tax on luxury and sin goods such as pan masala, tobacco, aerated drinks, high-end cars, yachts, and private aircraft ensures fairness and revenue balance.
Alongside, registration and return filing have been simplified, refunds made faster, and compliance costs reduced, easing the burden on businesses, especially MSMEs and startups.
Sitharaman also mentioned that Prime Minister Narendra Modi had contacted her eight months ago to explore ways of revamping the GST framework.
PM Modi had emphasised the need to simplify the system with a strong focus on easing the burden for the middle class, she added.
She further explained that GST 2.0 has been designed to minimise disputes and ensure clarity for both businesses and states.