GST 2.0 a Leap Towards Simplicity and Accountability: Sitharaman

Finance Minister Nirmala Sitharaman Friday, emphasised that Goods and Services Tax (GST) 1.0 focused on unity, while GST 2.0 prioritises simplicity, and hinted at future reforms.

In an exclusive interview with India Today, she shed light on the upcoming GST 2.0, set to be launched on September 22. She noted that GST 1.0 focused on unity, GST 2.0 on simplicity and hinted at what GST 3.0 may bring. She underlined that GST 2.0 would be a simpler tax structure with increased accountability.

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The government is set to implement the Goods and Services Tax (GST) 2.0 from September 22, introducing a two-slab structure to simplify taxes and make them more consumer-friendly.

Addressing concerns about rate-cut benefits being passed on to people, she explained how the government plans to track the benefits. She said that the recent GST rate cuts are expected to put more money in the hands of consumers by lowering taxes on everyday goods and services. However, questions remain about whether businesses will actually pass on the savings to buyers.

“GST is a good and simple tax. No doubt. One nation, one tax—not now. Can a Benz car and a hawai chappal be treated in the same way? Can they have the same rate?” she questioned.

“Industry has assured us they will pass it on,” she claimed, referring to businesses passing on tax savings to consumers. “We are talking with various stakeholders to ensure that benefits actually reach customers. And most industry stakeholders have assured that they will pass on the benefit,” she said.

The GST 2.0 introduces a two-slab structure, and the 5 per cent slab will be on essentials like food, medicines, and health insurance. The 18 per cent slab is for the standard goods and services.

To monitor the process, the Central Board of Indirect Taxes and Customs (CBIC) will spend the next one to one-and-a-half months tracking whether the rate cuts are reflected in actual consumer prices.

“We are talking with various stakeholders to ensure that benefits actually reach customers. And most industry stakeholders have assured that they will pass on the benefit,” said Sitharaman.

Speaking about the GST system overall, the finance minister said the government’s approach indicates a focus not only on reducing consumer costs but also on maintaining accountability among businesses, ensuring that the rate cuts translate into real savings for the public.