New Delhi: Emphasizing the spirit of cooperative federalism, Union Finance Minister Nirmala Sitharaman has written to the finance ministers of all states, expressing gratitude for their support and active role in implementing the landmark overhaul of the goods and services tax (GST) regime.
In an interview with PTI, Sitharaman said that while states initially shared diverse opinions on the proposal to restructure tax rates, they ultimately recognized that the move would benefit the common citizen—a perspective that helped achieve a unanimous decision at the GST Council meeting earlier this week.
The overhaul, set to take effect from September 22, will lower GST rates on a wide range of products, including butter, chocolates, shampoos, tractors, and air conditioners. The proposal was approved at the GST Council meeting on September 3, which is chaired by Sitharaman and includes representatives from all states and Union Territories.
“Yesterday, I wrote to each finance minister to thank them. You can have intense discussions and debates, but in the end, the Council rose to the occasion and provided relief to the people of India. I am truly grateful for that,” she said, describing the work of the Council as “remarkable.”
Despite initial concerns over potential revenue loss from consolidating GST slabs—reducing them to 5% for essential goods and 18% for all other items, eliminating the 12% and 28% slabs—the Council unanimously approved the tax rejig. The panel, originally scheduled for a two-day meeting starting September 3, reached a decision on the first day after an extensive deliberation.
“The sense of the house was that this proposal would undeniably benefit the common man. There was no reason to oppose it. Ultimately, everyone came together for a good cause, and I am sincerely grateful,” Sitharaman said.
She noted that states have generally supported rate reductions, with their main concern being revenue implications. “I appealed to them for the sake of the people of India. This isn’t just about states—the Centre will also see some impact—but lower rates will encourage spending, which will offset revenue concerns. That’s how consensus was reached,” she added.
At a press conference following the GST Council meeting, Sitharaman expressed her appreciation for the states’ cooperative and collaborative approach, highlighting that every comment and suggestion received a patient and thorough hearing.
“All points were carefully deliberated before reaching a consensus,” she said, noting the inclusive nature of discussions. Ministers who wished to speak again after their initial points were already debated were given the opportunity, and their additional inputs were considered.
The Finance Minister lauded the states for their constructive participation in the GST Council and their commitment to driving this significant tax reform.
