Indore: The recent GST reforms will spur market consumption and boost the domestic economy, Minister of State for Finance Pankaj Chaudhary said on Monday.
He said the impact of these reforms will be known in the next four to six months.
Chaudhary interacted with businessmen, entrepreneurs, and tax experts in Indore regarding the Goods and Services Tax reforms.
“Prime Minister Narendra Modi believes that when GST reforms bring additional money into the hands of the common people, it will definitely boost market purchasing and accelerate our economy,” he said.
Chaudhary said that though the GST system was introduced in 2017 under the leadership of PM Modi, efforts for it were going on for 10 years.
Taking aim at the previous Congress-led UPA government, the MoS said, “The then government was not successful in introducing the GST system because people didn’t trust that government. The lack of credibility was the reason that the erstwhile government couldn’t convince states to adopt the GST system.”
He alleged that the business community faced numerous difficulties due to a tax system riddled with various glitches when the previous government was in power.
Without providing specific details about taxes, the minister said, “At that time, you (business people) had to pay an average of about 15 per cent in taxes. However, after the implementation of the GST system in 2017, this tax payment dropped to 11 to 11.50 per cent”.
“The impact of GST reforms will be known in the next four to six months, and we cannot say anything right now, but it is estimated that this tax payment will further decrease to an average of eight to nine per cent”, he added.
He later interacted with the media.
When asked about the apprehension of tax revenues of states decreasing due to GST reforms, Choudhary said, “The government’s job is not just to collect revenue. The government’s job is also to provide relief to the common man. We won’t call this (GST reforms) a revenue loss. We have provided benefits to the public through this”.
“The savings from the GST reduction will put additional money in the hands of ordinary people. This will increase purchasing power in the market and boost our economy. This will make up (the reduction in state tax revenues which is apprehended).”
Chaudhary said suggestions of the business community and tax experts will be considered by the government and the GST Council, and appropriate action will be taken.
The reduced GST rates on about 375 goods and services came into effect from September 22, the first day of Navaratri.
GST rate on several essential goods and services has been brought down to 5 per cent or even zero. Life-saving drugs are now tax-free, while other medicines will attract just 5 per cent. For farmers, too, GST has been reduced to 5 per cent or nil. Educational materials that earlier carried 12 per cent GST have been exempted.
