"Trust-Based Tax System": Amit Shah To NDTV On New GST Structure

Union Home Minister Amit Shah has stated that the newly implemented GST structure represents a "trust-based tax system" that will enhance both production and consumption across the country. During an interview with NDTV's Editor-in-Chief Rahul Kanwal, Mr. Shah emphasized that this change would usher in a "new era of mutual trust" between citizens and the government.

"Various essential items including electricity, cement, daily food consumption, healthcare, insurance, and vehicles like automobiles, cars, trucks, tractors, plus all agricultural products will become more affordable. This is a significant decision. Benefits will begin reaching people immediately. I believe this will stimulate both production and consumption while establishing a trust-based taxation system in our country," Mr. Shah explained.

According to Mr. Shah, the GST reforms will convince the Indian population that taxation is "not intended to increase government revenue" but rather "to operate the country effectively."

"Whenever there's an increase, the government implements corresponding reductions. Prime Minister Narendra Modi has made this important decision. The 1.3 billion citizens of India will develop trust that taxation isn't merely about increasing government income but about governing the nation. I anticipate a new era of mutual trust developing between taxpayers and the government," he stated.

The Union Minister highlighted that GST collection has grown substantially from Rs 80,000 crore to Rs 2 lakh crore. "It's appropriate that GST now provides relief to the public. We could potentially even reach Rs 2.5 lakh crore. However, currently, the system has been established, collections have increased, and people will experience relief in numerous areas," he told NDTV.

The Minister criticized Opposition parties who have been questioning the GST structure since its inception, noting that "certain politicians" have attempted to discredit and defame it.

"They labeled it a waste tax. When they observed its success, they claimed it was originally their concept. They said Pranab Mukherjee conceived it, P Chidambaram developed it, suggesting we appropriated their idea. Yet they failed to implement it during their decade in power. PM Modi successfully implemented GST in just his fourth year," Mr. Shah remarked.

According to Mr. Shah, states had resisted the GST concept during the previous Congress-led administration. "Naturally, consolidating 16 different types of sales tax into one unified GST would impact state revenues. When Congress proposed this idea, states requested that the central government compensate for any negative financial effects. Congress agreed verbally, but states demanded a constitutional guarantee, which they refused to provide," he explained.

"Without a constitutional guarantee, who would trust them? When PM Modi took office, he reopened discussions. At that time, Arun Jaitley was Foreign Minister. The same concerns emerged again. Then PM Modi acknowledged our previous commitment to providing a constitutional guarantee and refused to backtrack. The ministries, bureaucrats, and government officials accepted significant responsibility, guaranteeing a 14 percent increase for five years. This enabled GST approval and its subsequent success," he said.

Mr. Shah noted that this guarantee period concluded last November.

The revised GST rates became effective today, reducing prices for numerous household items, vehicles, electronics, and other goods. These changes represent the most comprehensive overhaul since GST's introduction in 2017, replacing the previous four-tier structure of 5%, 12%, 18%, and 28% with just two primary rates: 5% and 18%.

Under these reforms, daily essentials, insurance policies, automobiles, electronics, appliances, stationery, beauty services, lifestyle services, and machinery will become more affordable. Ultra-luxury items will be taxed at 40%, while tobacco and related products remain in the 28% plus cess category.

Prime Minister Narendra Modi addressed the nation before the GST 2.0 implementation, stating that India is taking a "significant step toward Atmanirbhar Bharat on Navratri's first day."

"Tomorrow marks the rollout of next-generation GST reforms, beginning a GST savings festival. Your savings will increase, making purchases more accessible. The poor, middle class, youth, women, and traders will significantly benefit from these GST reforms. These changes will accelerate India's growth trajectory, improve ease of doing business, attract greater investment, and ensure every state becomes an equal participant in national development," he declared.

The Prime Minister characterized the 2017 GST implementation as a "historic" decision. "For decades, our citizens were entangled in a complex web of different taxes. We prioritized GST in the national interest, engaging with all stakeholders and addressing state concerns. With universal state support, this massive tax reform was successfully implemented," he concluded.