New GST reforms designed to benefit households, farmers and MSMEs: Sitharaman in Kolkata

Speaking at the discussion, Sitharaman said the Goods and Services Tax (GST) Council "unanimously approved the reforms" after months of review.

The revamped GST, she said, was designed "keeping five key parameters in mind — will it benefit the poor and middle class, support aspirational consumption of the middle class, provide relief for farmers, support micro, small and medium enterprises (MSMEs), and propel India to Viksit Bharat by 2047?”

Earlier this month, the GST Council approved a sweeping overhaul of the indirect tax system.

Effective September 22, the Council reduced the four-rate GST structure to two slabs, eliminating the 12% and 28% rates and retaining only the 5% and 18% slabs, a move aimed at easing the burden on the middle class.

"We moved from a complex four-tier structure to a simpler two-rate system of 5 percent and 18 percent," Sitharaman said, adding that demerit and “sin goods” would continue to attract a 40 percent rate.

"This new generation GST is not just for reducing the rate and the burden on the citizen but also for clearing up the confusion which businesses face, making it easy for compliance," the finance minister stressed.

Bengal's influence

Highlighting West Bengal’s role in shaping the reforms, Sitharaman noted that the tax relief is expected to benefit Bengal’s artisans, farmers and small entrepreneurs by making their products more competitive in both domestic and international markets.

"Bengal had a strong influence in the decision-making," she remarked.

The minister described the changes as a "self-enforcing chain" that would trigger higher consumption, providing "relief" to every household.

"If there is a shortfall, both the Centre and the states share it equally. There is no donor-donee relationship in the GST Council — we are equals,” she said, crediting opposition-ruled states for their cooperation.

Calling the reforms a “virtuous cycle”, Sitharaman said they will reduce household burdens, encourage consumption, and give India’s economy a push toward its 2047 growth targets.