- Home Minister Amit Shah called the new GST framework a trust-based tax system
- The GST slabs have been reduced from four to two, with now only 5% and 18% rates applicable
- Reform will reduce prices on household items, vehicles, electricity, cement, and agri products, said Shah
Union Home Minister Amit Shah has described the new GST framework, that comes into effect from Sept. 22, as a "trust-based tax system". In an exclusive interview with NDTV, Shah expressed confidence that the revamped structure would boost both production and consumption across the country.
Speaking to NDTV's Editor-in-Chief Rahul Kanwal, Shah added that the new simplified structure would usher a "new era of mutual trust" between the people and the Narendra Modi led government.
Notably, similar sentiment was echoed by Finance Minister Nirmala Sitharaman when she emphasised that GST reform will pave the way for a consumption boost.
The new GST rates have come into effect on Sept. 22, with a range of household items, cars, bikes, and TVs, among others, becoming cheaper.
The primary change is the rollback from the earlier four GST slabs of 5%, 12%, 18%, and 28% to a new two-slab system of 5% and 18% rates.
Shah also stated that GST collections have increased, growing from approximately Rs 80,000 crore to Rs 2 lakh crore. "It is time GST gives relief to the public. We could even go from Rs 2 lakh crore to Rs 2.5 lakh crore. But for now, the system has been made. The collection has increased. People will get relief from many things."
Shah also told NDTV that earlier, there was resistance from states to the idea of GST during the then Congress-led government. "Because, naturally, by collecting 16 types of sales tax, we make one sales tax; we make GST. In this, 16 types of tax will merge. So, it was going to affect the income of the states."
He noted that, "when Congress came up with this idea, the states said that the adverse effects should be paid by the central government. They said, 'Yes, we will do it.' So, the states asked for a constitutional guarantee, which they did not give."
"Electricity, cement, daily consumption of food, healthcare, insurance, automobiles, cars, trucks, tractors, and all products used in agriculture will be cheaper. This is a very big decision. People will start receiving benefits today onwards. I believe that this will increase production and consumption. There will be a trust-based tax system in the country," Shah said.
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