Finance Minister Nirmala Sitharaman mentioned that the GST Council will proceed with the decision to have fewer and lower rates, as the review work is on track for completion.
Goods and Services Tax (GST) is a four-tier tax structure with slabs at 5, 12, 18 and 28 per cent. Luxury and demerit goods are levied to tax at the highest bracket of 28 per cent, while packed food and essential items are in the lowest 5 per cent slab.
The Council, chaired by Sitharaman and including her state counterparts, has set up a group of ministers (GoM) to recommend modifications in GST rates as well as lessen slabs.
To be fair to the GST and the ministers in the council, the work on rationalizing and streamlining GST rates has already begun. It began nearly three years ago.
Sitharaman later stated that the scope of the project had been expanded and that the work was nearly complete.
She also mentioned that she advised the ministers in the Council to take a closer look at the rates, as they pertain to everyday items consumed by common people. The minister emphasized the importance of ensuring that no opportunities are missed.
“For me, it was also important that we don’t lose an opportunity, that we can even bring down the number of rates, which is also the original intent that we wanted fewer rates and lower rates. So work has got to happen on that, and I hope the GST Council will decide on it soon,” Sitharaman mentioned.
The minister after presenting the Union Budget 2025-26 which also furnishes income tax relief to the middle class claimed that the economic fundamentals of the country are stronger since no structural slowdown is there.
Tax relief in the Budget demonstrates the Prime Minister’s commitment to taxpayers, Sitharaman stated, and she dismissed speculation that the initiative was intended to influence the Delhi Assembly elections.
She too specified that there is no proposal to discontinue the old regime.
The minister concerning the question of capital expenditure mentioned that the capex has not lowered but has surged to Rs 11.21 lakh crore which is 4.3% of the GDP.
For financial year 2025-26, the Budget proposed to spend Rs 11.21 lakh crore for capital expenditure (capex), more than Rs 10.18 lakh crore in the Revised Estimates for FY25.
It was Rs 10 lakh crore in FY24, Rs 7.5 lakh crore in FY23, Rs 5.54 lakh crore in FY22 and Rs 4.39 lakh crore in FY21.
The Budget analyzed a fiscal deficit of 4.4 per cent of Gross Domestic Product (GDP) for FY26 and lowered the target for FY25 by 10 basis points to 4.8 per cent of GDP.
