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It is counted among the biggest tax reforms since the implementation of GST in India. Finance Minister Nirmala Sitharaman hinted at GST 3.0 in a recent exclusive interview and also said that it is now a "Good and Simple Tax". He made it clear that GST reforms will directly benefit the common man and the government will also closely monitor it.
In this article, we will know in detail what the Finance Minister said on the prospects of GST 3.0, reduction in rates, GST on petrol and diesel, impact on education and insurance sector, and One Nation One GST.
1. GST is now 'Good and Simple Tax'
The Finance Minister said that GST has created a unified system by abolishing different tax laws spread across the country .
- Before GST, every state had different tax rates.
- While applying, a balanced rate was fixed keeping those rates in mind.
- Now this tax is really simple and good.
2. Backlash on 'Gabbar Singh Tax'
Taking a dig at the opposition, Sitharaman said that those who once called GST "Gabbar Singh Tax", are now taking credit for it.
- She taunted the Congress that during Indira Gandhi's time, tax on income tax was charged up to 91%.
- Today, the same parties are trying to project the GST reforms as their achievement.
3. GST 2.0 and Benefit Access to Consumers
After the rate cut, the government wants to ensure that the benefit reaches the buyers.
- Industries have assured that they will pass on the benefits to consumers.
- The Central Board of Indirect Taxes and Customs (CBIC) will conduct a strict vigil for the next 1-1.5 months.
- If the companies do not pass on the profit, strict action will be taken.
Why are petrol and diesel out of GST?
Sitharaman said that petrol and diesel have been deliberately excluded from GST.
- At present, the central government excise and state governments charge VAT on these.
- This is a huge revenue source for both the states and the Centre.
- Inclusion in GST may affect the financial situation.
5. Impact of GST on Education Sector
A student questioned that education has become expensive, so why not reduce the tax?
- Sitharaman said that the tax burden on schools and genuine education institutions was not increased.
- But coaching and training centers are considered commercial education, so GST is applicable there.
6. GST exemption on health and insurance
In the interview, he said that the benefit of GST exemption on insurance premium should reach the public.
- Public sector insurance companies should come forward and set an example.
- Private companies are also expected to pass on the benefit of tax deductions to the customer, not to themselves.
- The government will monitor and action will be taken if there is a disturbance.
7. Indication of GST 3.0
Sitharaman said:
- GST 1.0 (2017) - One Nation, One Tax.
- GST 2.0 - Simplicity and Rate Cuts.
- GST 3.0 will bring further improvements in the coming years, which will directly benefit the consumers.
- Everyone, including public sector companies, will be monitored.
8. No relation to Trump tariffs and GDP
Some experts questioned whether the GST cut was linked to Trump tariffs or GDP growth.
- Sitharaman made it clear that it is completely driven by domestic needs.
- These improvements were made in view of 8 years of experience and challenges like Corona.
- The aim is only to reduce the burden on the common man.
9. One Nation One GST is not possible yet
He said that the conditions of the country are different right now:
- The demand for luxury goods is high in developed areas.
- In less developed areas, essential commodities are purchased.
- So, a Mercedes car and a Hawai chappal cannot be taxed the same.
10. This is not the Bihar election, but the manifesto of the whole country
On the opposition's allegations that the GST rate cut is linked to the Bihar elections, Sitharaman said:
- This is not the manifesto of Bihar but of 140 crore Indians.
- GST reform will impact every state and every citizen.
With this, if you are also thinking of GST registration or filing GST returns online and you are at the beginner level, then you can also take the help of a professional or CA and legaldev.in/gstregistration.co can also be the best option for you.
Conclusion
This interview of Finance Minister Nirmala Sitharaman is an indication that GST is constantly evolving. GST 3.0 will become simpler and more beneficial for consumers in the coming time. The government has made it clear that the benefits of rate cuts must reach the general public and will be strictly monitored.
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