GST rates will come down further, tax review in final stages: FM Nirmala Sitharaman

Finance Minister Nirmala Sitharaman on Saturday (March 8, 2025) said the Goods and Services Tax (GST) rates will see further reductions as the rationalisation of tax slabs is in its final stage. She highlighted that the revenue neutral rate (RNR) has already dropped from 15.8 per cent in 2017, when GST was introduced, to 11.4 per cent in 2023 and is expected to decline further.

Speaking at an award event, Sitharaman noted that the Group of Ministers (GoM), set up in 2021 to suggest tax rate revisions, has completed its work. However, she has taken it upon herself to conduct a final review before presenting the recommendations to the GST Council.

"We are very close to coming to a final call on some of the very critical issues, reduction, rationalisation of rates, looking at the number of slabs and so on," she said.

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The next GST Council meeting is expected to address the remaining concerns regarding rate rationalisation. “Some more work is required, but we are nearing a conclusion,” the minister added.

Stock market volatility and global uncertainties

Responding to concerns about stock market volatility, Sitharaman pointed to global factors such as geopolitical tensions and security threats in key trade routes. “It is like asking if the world will be calm, if wars will end, or if the Red Sea will be safer. These factors are beyond our control,” she said.

On the issue of stake dilution in public sector banks (PSBs), the finance minister reiterated the government’s commitment to increasing public float. “We want more retail investors in PSBs,” she said, indicating a push towards broadening investor participation in the banking sector.