GST empowers people with pro-poor measures, says Finance Minister Nirmala Sitharaman

Union Finance Minister Nirmala Sitharaman administered the oath of office to Justice (Retd) Sanjaya Kumar Mishra as the first President of the GST Appellate Tribunal (GSTAT) on Monday.

 She also emphasized the significant impact of the Goods and Services Tax (GST) regime, highlighting its pro-poor stance.

"Reflecting a pro-poor approach, the effective weighted average GST rate has consistently fallen since 2017. The Revenue Neutral Rate was suggested to be 15.3 percent but was lower at 14.4 percent in 2017, and it has come down to 11.6 percent in 2019," she said.

Sitharaman underscored that the recent milestone of GST collections exceeding Rs 2 lakh crore was propelled by heightened economic activity, marking a positive trajectory for the nation's fiscal landscape.

She pointed out that the GST framework has led to reduced taxes on several essential items compared to pre-GST rates. Notable examples include hair oil and soaps, which saw a decrease from 28% to 18%, and electrical appliances, whose tax rate dropped from 31.5% to 12%. This move reflects a deliberate effort to alleviate the tax burden on the common populace.

Highlighting the evolution of the GST tax structure since its inception, Sitharaman mentioned that the effective weighted average GST rate has consistently decreased, demonstrating a commitment to progressive tax policies. She elaborated on the measures taken to rationalize tax rates and ensure that the benefits are passed on to consumers, underscoring the role of the National Anti-profiteering Authority in this process.

The Finance Minister also traced the historical trajectory of GST, noting that while the concept was initially proposed under the Atal Behari Vajpayee-led NDA government, it was under Prime Minister Narendra Modi's leadership that the necessary consensus was achieved for its implementation. She emphasized that the GST has streamlined India's previously fragmented and complex indirect tax system, bringing about significant simplification and efficiency.

Sitharaman emphasized that GST has revolutionized tax compliance through uniform processes, simplified registration, and minimal physical interface, leading to substantial benefits for businesses, particularly micro, small, and medium enterprises (MSMEs). She highlighted the positive feedback from MSMEs, with 88% acknowledging the tax's role in reducing costs and optimizing supply chains.

Furthermore, Sitharaman noted the remarkable increase in the number of registered taxpayers under GST and the utilization of schemes like the Quarterly Returns with Monthly Payment (QRMP) by small taxpayers and MSMEs. She pointed out that GST has facilitated MSME financing through various tools and frameworks, contributing to the sector's growth and resilience.