Sitharaman Hails States’ Unity in Approving Landmark GST Overhaul

Union Finance Minister Nirmala Sitharaman has written to finance ministers in every state to thank them for their support and active participation in implementing the historic reform of the goods and services tax (GST) system.

PTI reported that Sitharaman said states debated the idea of changing tax rates but ultimately decided that it was in the best interests of the average person. This reasoning enabled the GST Council come to a unanimous conclusion earlier this week.

At a meeting of the GST Council on September 3, it was decided to implement the reform, which will lower the prices of a wide range of goods starting on September 22. These goods include butter, chocolates, shampoos, tractors, and air conditioners.

All states and Union Territories have representatives on the panel, which is led by Sitharaman.

"Yesterday, I have written a letter to each finance minister thanking them, saying, you can have any number of intense discussions and arguments, but finally, the Council rose to the occasion and gave relief to the people of India, to all people of India. And, I am grateful for that gesture. So, I wrote that letter," she said.

"Remarkable" is how she described the work at the Council.

According to PTI, the GST Council unanimously decided on the GST rejig despite concerns about the income loss from removing the 12 and 28 per cent slabs and categorising most products into two categories: 5 per cent for common use goods and 18 percent for everything else.

The panel was supposed to meet for two days beginning on September 3 to review the Centre's proposal, but after a long day of meetings, they decided to approve it on the first day.

"So the sense of the house was, this is a proposal which is going to benefit the common man undoubtedly. There is no point in standing against it... Ultimately everybody came together for a good cause, and I'm truly very grateful," Sitharaman said.

The minister said states were always in favour of rate reduction and their only concern was with regard to their revenue implications post-tax cuts.

"I even appealed to them, saying, for the sake of the people of India, Please. It's not just the states. It's even the Centre that is going to get affected by the reduction. But we'll make up for it because once the rates come down, people are going to come out to buy, and that will take care of it (revenue impact). That's how consensus was arrived at," she said.

Speaking at a news conference after the GST Council meeting, Sitharaman thanked the states for their collaboration and teamwork in putting one of India's biggest tax changes into effect.

She stated on Saturday that every recommendation and opinion made by its members had been patiently heard by the Council.

"All points were thoroughly deliberated before arriving at a consensus," she stated.

She also emphasised how inclusive the conversations were, noting that a number of ministers who wanted to speak again after their original concerns had been discussed were given the chance.

"Their additional inputs were heard and taken into account," the Finance Minister emphasised. She also credited states for their constructive participation in the GST Council and their commitment to driving tax reform.