FE Exclusive | FM Nirmala Sitharaman Hints at Lower GST Rates: ‘The Expectation Is That It Will Come Down’
In a significant statement that may signal relief for both consumers and businesses, Finance Minister Nirmala Sitharaman has hinted at the possibility of a reduction in Goods and Services Tax (GST) rates in the near future. Speaking in an exclusive interview, Sitharaman said, “The expectation is that it will come down,” when asked about GST slab revisions.
🧾 What the FM Said
The Finance Minister refrained from giving a definitive timeline but stressed that efforts are underway to rationalize GST rates, indicating that the government is seriously evaluating the demands raised by multiple stakeholders including industry associations, economists, and small businesses.
“We are aware that GST, in its current form, has multiple slabs and anomalies that need correction. We’ve been consulting with the GST Council, and the expectation is that it will come down in some segments,” Sitharaman noted.
📊 What This Means for the Economy
If implemented, lower GST rates could:
Boost consumer spending
Ease cost pressures on MSMEs
Simplify tax compliance
Enhance ease of doing business in India
Analysts suggest that a rate cut ahead of the festive season or Union Budget 2026 could revive sentiment across key sectors such as FMCG, electronics, auto components, and hospitality.
🏛️ What’s the GST Council’s Role?
The GST Council, chaired by the Finance Minister and comprising state finance ministers, is the apex body responsible for deciding GST slabs. The next meeting is expected to include:
Discussion on two-rate structure vs multi-slab GST
Lowering rates for essential items and daily-use goods
Reviewing high-taxed sectors like insurance, cement, and online gaming
💡 Industry Reactions
Leading business associations like FICCI and CII have long pushed for rationalizing the 28% slab and merging 12% and 18% rates. The FM’s latest comments are likely to raise optimism in the corporate sector.
❓ Frequently Asked Questions (FAQ)
Q1: What did Nirmala Sitharaman say about GST rates?
A: She hinted that GST rates may come down soon, stating “the expectation is that it will come down,” without committing to a fixed timeline.
Q2: When is the next GST rate revision expected?
A: While no official date is confirmed, discussions in the upcoming GST Council meetings may lead to rate cuts before the Union Budget 2026.
Q3: Which sectors might benefit from a GST rate cut?
A: Sectors like FMCG, small-scale manufacturing, auto parts, hospitality, and insurance may benefit from lower GST rates.
Q4: Will the GST slab structure be simplified?
A: The government is considering merging existing slabs (like 12% and 18%) to simplify the tax system.
Q5: Is this the first time GST reform has been hinted at in 2025?
A: No, but this is the clearest signal yet from the Finance Minister about upcoming reforms aimed at making GST more efficient and growth-oriented.
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Reported by Benny on June 30, 2025.
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