GST rate cuts to boost economy without reducing revenue: Choudhary

Indore: Union minister of state for finance Pankaj Choudhary on Monday said that GST rate cuts did not reduce revenue, but instead benefited the public by increasing their savings, which would lead to higher purchases and ultimately boost the economy.

"The govt's role is not only to collect revenue but also to provide relief to the common people. We won't say that a GST cut reduces revenue. Instead, we are benefiting the public. As money reaches people's hands, savings will increase, leading to more purchasing, and our economy will grow and compensate for it," said Choudhary on the sidelines of an interactive session here to discuss reforms under GST 2.0.


He said GST has been widely welcomed, though some issues were raised, which are being addressed through continuous improvements and clarifications. After GST was implemented in 2017, an average tax of 11 to 11.50 percent was being collected, and reforms under GST 2.0 are expected to bring tax collections to around 8 to 9 percent.

Choudhary also pointed out that while GST was rolled out in 2017, the efforts began 10 years earlier, but the previous govt failed to implement it due to a lack of credibility to convince states.

The minister said the govt is now reaching out directly to people to understand their issues and suggestions and constructive feedback will help shape future reforms. Under GST 2.0, the govt has reduced taxes on around 391 goods either to nil or brought them under the 5 percent slab.

Around 200 participants, including representatives of Laghu Udyog Bharati, industry associations, chartered accountants, and tax consultants, attended the session organised with CSGT officials. Industry players raised several concerns, including the gap between GST cuts on finished products and packaging costs.

Industrialist Deepa Mehta pointed out that GST was reduced on bakery items, but packaging material remained costly. Representatives of the paper industry said that while notebooks have come under the 0 percent slab, other paper sectors continue to attract 18 percent GST, creating complications in passing on the benefits.