Union Finance Minister Nirmala Sitharaman on Sunday said the GST regime has emerged as a "win-win" for both citizens and States, with the latest round of reforms delivering tangible benefits for households, industry and governments alike.
Speaking at a joint conclave of trade and industry associations in Chennai on the theme 'Tax Reforms for Rising Bharat', the Finance Minister underlined that 99% of all goods earlier taxed at 12% GST have now been moved to the 5% bracket.
"This is a reform that touches the lives of all 140 crore people. The GST rate cuts in the range of 10-13% will directly reduce expenses, leaving more disposable income in the hands of the people," Sitharaman said, adding that she expected companies to pass on these benefits to consumers.
Stronger Tax Base and Collections
Tracing the growth of the indirect tax system since its rollout in 2017, Sitharaman said the number of GST taxpayers has more than doubled - from 65 lakh in 2017 to 1.51 crore in 2025. Gross GST receipts, she noted, have jumped from Rs 7.19 lakh crore in 2017 to Rs 22 lakh crore in 2025, with monthly collections averaging around Rs 1.9-2 lakh crore, shared equally between the Centre and the States.
Of the Centre's share, she added, 41% is further devolved to the States, strengthening cooperative federalism.
Key Features of GST 2.0
The Finance Minister said that nearly eight months of consultations with State Finance Ministers had gone into shaping the GST 2.0 framework. Among the major changes:
- Rate cuts on over 350 items, including food items, which are now taxed at 0% or 5%.
- Simplified registration processes, enabling GST registration within three days.
- Resolution of product classification disputes, which had earlier led to conflicting State-level court rulings.
- Streamlined refund procedures, easing compliance for businesses.
She added that the GST 2.0 reforms were designed keeping in mind five key considerations - the impact on daily use items for poor and middle-class households, benefits to farmers, lowering raw material costs for MSMEs, boosting key sectors of the economy and reducing compliance complexity.
Industry Reactions
Industrial leaders from CII, FICCI and state trade bodies welcomed the reforms, but also flagged certain concerns.
- The President of Hindustan Chamber of Commerce described the hike in GST on paper and paperboard from 12% to 18% as a "major shock" for the sector.
- Industry representatives sought rationalisation of GST on coastal shipping and inland water transport, which they termed vital for cutting logistics costs.
- The Tamil Nadu Traders Association raised concerns over harassment of small traders by GST officials and called for a settlement scheme to clear pending GST dues.
Broader Tax Reform Push
FM Sitharaman also pointed out that the GST 2.0 rollout came alongside major steps in direct taxation - including personal income tax cuts and the introduction of a new Income Tax Act, all within the past eight months.
"These reforms were not piecemeal, but part of a policy-driven exercise aimed at strengthening the economy, empowering the poor and middle class, and easing the cost of doing business," the Finance Minister said.
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