New Delhi: Finance Minister Nirmala Sitharaman announced on Wednesday that the next-generation GST reforms are expected to inject Rs 2 lakh crore into the Indian economy, giving consumers more money in their pockets through lower taxes. She also noted that several companies are already passing on the benefits of the GST cut to customers ahead of the official implementation date of September 22.
Addressing the Outreach and Interaction Programme on Next Gen GST Reforms, Sitharaman said, “With this new gen tax regime, with only two slabs (5 per cent and 18 per cent), Rs 2 lakh crore is injected into the economy. People will have cash in hand.” (Also Read: Who Is Rajesh Yabaji? BlackBuck CEO Moves Out Of Bengaluru After Nearly A Decade– Know The Reason)
Major GST Reforms and Their Impact
As a result of the new GST structure, 99 per cent of goods previously under the 12 per cent slab have shifted to 5 per cent, while 90 per cent of items under the 28 per cent slab now fall into the 18 per cent bracket. According to Finance Minister Sitharaman, the Modi government approached these reforms through five key lenses: benefiting the poor, meeting the aspirations of the middle class, supporting farmers, enabling MSMEs to create jobs, and boosting exports.
GST Revenue Growth and Tax Relief on Essentials
India’s GST revenue has surged to Rs 22.08 lakh crore in FY25 from Rs 7.19 lakh crore in FY18, Finance Minister Sitharaman said, while the GST base expanded to 1.51 crore from 65 lakh. Several everyday items have been exempted from GST, including UHT milk, paneer, khakhra, pizza bread, roti, and parathas. Meanwhile, butter, ghee, cheese, condensed milk, jams, sauces, soups, pasta, namkeens, and confectionery will now attract just 5 per cent tax, down from 12-18 per cent. Even dry fruits like almonds, cashews, pistachios, dates, figs, and citrus fruits have seen their GST cut to 5 per cent. (Also Read: India To Remain World’s Fastest-Growing Major Economy Despite Global Uncertainty: S&P Global)