Union Finance Minister Nirmala Sitharaman announced the benefits of the change in GST rates from September 22. She said that the change in GST rates is going to be a big win for every citizen of the country. PM Modi had given instructions to change GST rates on Diwali, but we implemented them much before Diwali.
In the joint conference of the Trade and Industry Association on the topic of 'Tax Reforms for Emerging India' of the Chennai Citizen Forum, Union Finance Minister Nirmala Sitharaman said that the beneficial effect of the change in GST rates will be on all products from morning till bedtime. Under GST, 99% of the items that were earlier taxed at 12% have now been reduced to 5%.
He said the GST Council has reduced tax rates on over 350 items. The Centre has introduced only 5 and 28% slabs instead of the earlier practice of taxing under different slabs. We have also simplified the process for traders. There is no 28% GST tax on any product.
The Union Finance Minister said opposition party leader Rahul Gandhi had called GST Gabbar Singh Tax, but after the implementation of GST, the number of businesses paying tax has increased to 1.5 crore in the last eight years, as they realised they would be able to benefit from it. This number will increase further in the future. This increase has led to an increase in the revenue of the central and state governments.
He said the tax collection in 2017 was Rs 7.19 lakh crore, and now the gross GST collection has crossed Rs 22 lakh crore. On average, revenue of Rs 1.8 lakh to Rs 2 lakh crore is collected by the Centre and state governments. The gross revenue of Rs 1.80 lakh crore is shared equally, with states getting Rs 90,000 crore and the Centre getting Rs 90,000 crore. Even out of the Centre's share of Rs 90,000 crore, about 41% goes back to the states. She said that from this, we can understand that GST will benefit the public and the state government.
On the issue of classification raised by traders before the implementation of GST reforms, Sitharaman gave an example and said that a classification has been done for the sale of popcorn. If salty popcorn is sold, then it will attract a 5% tax if sold in the salty category, while sweet popcorn is taxed at 18%. There is no tax on roadside popcorn. But when the same popcorn is branded and made in a factory, then this classification is applicable. But in the new GST reforms, it has been simplified. Now, all food products have come in the slab of 5 percent or no tax has been imposed on them. Now there is no problem of classification. This popcorn is an example for all of you to understand.
Sitharaman said that such measures have been taken to accelerate the Prime Minister's vision of a developed India. I hope people will welcome this step. In fact, many companies like Hindustan Unilever Limited and Godrej have assured me that they will pass on its benefits to the public.
The Union Finance Minister also released a book in English and Tamil. It shows the benefits that Tamil Nadu will get after the implementation of GST reforms. She said that what was the taxation earlier, what is new, and how will Tamil Nadu benefit from GST reforms? It has been clearly mentioned here, and I urge all of you to read this book, which is available in both English and Tamil.
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