India's GST reforms not knee-jerk reaction to US tariffs: FM
Finance Minister Nirmala Sitharaman has made it clear that India's latest GST reforms aren't a knee-jerk reaction to the US slapping 50% tariffs on Indian exports.
Instead, these changes—like simplifying tax rates and making health and life insurance premiums exempt—have been in the works for over 18 months, even before the 2024 budget.
India is moving to just 3 main GST rates
A key GST Council meeting was held on September 3 and 4, where consensus was reached for India to move to just three main GST rates: 5%, 18%, and 40% for luxury and sin goods.
Everyday essentials like bread and UHT milk will be tax-free, while sectors like agriculture, health, and labor-intensive industries get relief too.
The goal? Make taxes simpler and fairer while aiming to balance fiscal sustainability, though some revenue loss is anticipated.
This shift aims to ease costs for consumers (yep, that means us) and boost growth—all while keeping the balance between central and state finances intact.