Finance Minister Nirmala Sitharaman
Finance Minister Nirmala Sitharaman gave a press conference on Wednesday night to the country of Diwali, which was announced by Prime Minister Narendra Modi from the ramparts of the Red Fort. Almost all the things used in everyday have come in a slab of 5%. Consumer durables such as fridge, TV, washing machine and up to 1200 cc vehicles are kept in a slab of 18%.
GST will not be levied on roti, paratha, dairy products and private insurance and 40 percent tax on things like tobacco, gutkha and cigarettes will be levied. Its long term effects will be seen on the economy of the country. Some experts are even saying that this is part 2 of liberalism of 1991. There is a wave of happiness among the common man as well as traders.
The Confederation of All India Traders (CAIT) has termed the latest GST reforms and reorganization declared by the central government as historic and revolutionary. The organization says that these reforms will give immense benefits to small traders, consumers and the country’s economy. This step is not only towards simplifying the tax structure, but will also prove to speed up the country’s economic activities by increasing the consumption.
Many things became cheaper at the new rate
- Things like soap, detergent, toothpaste
- Clothes and readymade garments, shoes and slippers
- Home appliances like mobile accessories, TV, fridge, washing machine
- Dry fruits, biscuits, sweets and packed food products
- Furniture and small electronic goods
- Fans, coolers, geyser and LED bulbs
- Bicycles, children’s toys, stationery and school bags
- Pressure Cooker, Mixi, Utens and Kitchen Appliances
- Packed products, tea, coffee and spices made from milk
- Home Decor and Plastic Household Products
Consumer spending will increase due to lack of tax rates on these items. The recent report of the State Bank of India (SBI) states that due to these GST reforms, there will be a significant increase in domestic consumption, which will directly affect retail trade and sale of small shopkeepers. The report estimates that consumption in the festive season can increase by 78%, which will lead to a tremendous boom in the market.
Rebate on insurance services, relief for consumers
The government has given great relief to the middle class and senior citizens by exempting GST on insurance services. This will make the premium rates of health insurance and life insurance more economical. After epidemic and rising health costs, this step will prove to be extremely useful for common families and insurance coverage will be encouraged.
National level benefits
- Consumers will purchase more due to decrease in increase in consumption, which will increase the demand for the market.
- Small traders will get direct benefit of increased demand for small traders, retailers and wholesales.
- When consumption increases industrial production, industries will have to produce more, which will speed up employment and industrial activities.
- Reorganization of simplicity rates in GST compliance will make the tax system more simple and transparent, which will reduce compliance cost.
- Steps towards two-rate GST are gradually reducing the complex rate structure of GST to 2 major rates, which will not only improve tax collection but will also bring stability in the business world.
GDP growth
Experts believe that the increase in consumption and the rise in industrial production will directly affect India’s GDP. It is estimated that these reforms in the upcoming financial year are possible to increase additional increase in GDP from 0.5% to 0.7%. This will not only increase the revenue of the government but will also strengthen India’s global economic image.
Cat’s approach
CAT National Joint General Secretary Sumit Aggarwal said that this GST reform declared by the government is a historic and visionary step. Consumers will get relief from reorganization and new power to small traders. This improvement will give new energy to the market, will speed up business and bring revolutionary changes in the country’s economic scenario. Prime Minister Shri Narendra Modi ji and Finance Minister Mrs. Nirmala Sitharaman ji have once again proved that their policies are going to strengthen small traders and retail trade.
Kat believes that these reforms –
- Business activities will intensify
- Small traders will be strong in competition
- GST compliance will be simple
- Industrial and retail sector will bring new energy
- And there will be a sharp growth in the country’s economy
Sumit Aggarwal in the end said that this reform is not only a change in tax, but a golden chapter of India’s business and a big step towards self -reliant India. In the coming time, its impact will be seen in the economic progress of not only small traders but the entire nation.