She said GST cuts will spur growth, offsetting US tariff impact, while reaffirming India’s continued purchase of Russian oil
New Delhi
Finance Minister Nirmala Sitharaman on Friday said that the recently announced Goods and Services Tax (GST) rate cuts would provide a strong push to domestic growth and offset the negative effects of the US tariff hike on Indian exports. In an interview with the media, she noted that the government’s primary focus is to ensure that these cuts, effective from September 22, are fully passed on to consumers.
Calling the move a big vigilance exercise, Sitharaman said, We have a lot of work post-22nd September, and we are confident the benefits will reach the common man. She added that MPs, industry leaders, and other stakeholders would be actively involved in monitoring the implementation of lower rates at the ground level.
The Finance Minister explained that the new GST structure reduces rates to two slabs—5 per cent and 18 per cent—removing the earlier 12 per cent and 28 per cent slabs. While this would lower the prices of most goods and services, she emphasized that a 40 per cent tax on luxury and sin goods such as pan masala, tobacco, aerated drinks, high-end cars, yachts, and private aircraft would maintain revenue balance and fairness.
On the global front, Sitharaman defended India’s continued purchase of Russian oil despite Western pressure, saying decisions were based on economic considerations. Since oil is the costliest item in our import bill and a big-ticket foreign exchange-related expense, we will undoubtedly be buying Russian oil, she said.
Addressing concerns over the US’s 50 per cent punitive tariff, Sitharaman assured that rising domestic demand spurred by GST reductions would help counter the drag on exports. She also indicated that the government would announce support measures for sectors most affected by the tariff hike.