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Informist, Friday, Aug. 29, 2025

 

--Minister Goyal: GST rate cut to boost domestic manufacturing

--CONTEXT: Minister Goyal speaking at an event in Delhi 
 

NEW DELHI - The upcoming rate rationalisation in goods and services tax is going to give impetus to domestic demand and help manufacturers, Commerce and Industry Minister Piyush Goyal said Friday. "We are also looking at giving a boost to domestic consumption and we will soon see GST Council meeting next week so that the impact of these changes can be felt by all of you very quickly and that can be a big demand booster to the entire manufacturing sector," he said at a curtain raiser event of Bharat Buildcon here.

 

The GST Council will hold its 56th meeting on Sept. 3-4 in Delhi. The meeting assumes significance after Prime Minister Narendra Modi's announcement in his Independence Day speech about the government's "Diwali Gift" in the form of lower goods and services taxes. The Centre has initiated an overhaul of the indirect tax structure which will include rationalisation of the number of GST rate slabs from four to two.

 

In its recommendation to the Group of Ministers on rate rationalisation, the Centre has suggested doing away with the 12% and the 28% tax slabs. The Centre has proposed to bring 99% of items under the 12% tax slab to the 5% slab and almost 90% of items under the 28% tax slab to the 18% tax slab. Currently, 65% of the total GST revenue comes from items falling under the 18% tax slab and 11% revenue is collected from items under the 28% slab. Only 7% and 5% GST is collected from items under 5% and 12% tax slabs, respectively. The Group of Ministers on GST rate rationalisation has accepted the Centre's proposal to shift to a two-slab structure.

 

These changes will help domestic manufacturing after the US' unilateral decision to impose 50% tariff on goods exported from India. "...we can become supplier to many countries of high-quality and attractively priced products which will help us in increasing our exports and also diversify our exports. The government is committed that (manufacturers) do not face stresses or difficulties in managing the current situation emanating from certain unilateral actions," he said.  End

 

Reported by Sagar Sen

Edited by Vandana Hingorani

 

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