Union Finance Minister Nirmala Sitharaman on Sunday described the latest GST reforms as a "huge victory for every citizen of India," highlighting their role in simplifying tax rates, broadening the tax base and boosting government revenues.
Speaking at the 'Tax Reforms for Rising Bharat' conclave organised by the Chennai Citizens Forum, Sitharaman said the reforms were rolled out ahead of schedule to align with the country's diverse festive calendar and Prime Minister Narendra Modi's directive to launch them before Deepavali.
GST Rate Cuts and Simplification
Sitharaman noted that 99% of goods previously taxed at 12% have now been brought under the 5% slab, while over 350 items have seen reductions across categories. Importantly, the contentious classification disputes that plagued GST 1.0 have been eliminated.
Citing the example of popcorn, the minister explained that under the old regime, salted popcorn was taxed at 5% while caramel popcorn attracted 18%. "Now, all food items are either taxed at 5% or exempt. There will no longer be classification confusion," she assured.
She added that the GST Council has streamlined the structure into just two slabs - 5% and 28%, abolishing multiple tax brackets that often confused traders. "There is no 28% GST on any product," FM Sitharaman clarified.
Growing Tax Base and Revenue Gains
The Finance Minister underscored GST's success in expanding India's tax base. "In 2017, when GST was introduced, only 66 lakh traders filed taxes. Today, the number has grown to 1.5 crore businesses," she said.
She also pointed to the surge in revenues, with annual GST collections rising from Rs 7.19 lakh crore in 2017 to over Rs 22 lakh crore in 2025. On average, Rs 1.8-2 lakh crore is collected monthly, of which nearly half goes to state governments. "This proves that both the public and the states benefit from GST," she said.
Industry Response and Consumer Benefits
FM Sitharaman revealed that FMCG majors like Hindustan Unilever, Godrej and Dabur have assured the government that the benefits of GST rate cuts will be passed on to consumers, lowering costs on essential goods and services.
She stressed that these reforms are designed to accelerate Prime Minister Modi's vision of Viksit Bharat. "From morning till night, the impact of GST will be felt in every product people use. I expect citizens to welcome this move wholeheartedly," she added.
Tamil Nadu-Specific Benefits
During the event, the minister also released a book in English and Tamil outlining how Tamil Nadu stands to gain from the GST reforms, with detailed comparisons between the earlier and current tax structures.
"These reforms not only simplify compliance but also strengthen the link between taxpayers, the Centre and the states. They mark a major step towards a cleaner, more transparent tax system," Sitharaman said.
The new reforms will come into effect from September 22, 2025.
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