Next generation GST reforms lead to growth in sales across sectors: Sitharaman

Union Finance Minister Nirmala Sitharaman has said that the implementation of next-generation GST reforms on September 22 has led to a growth in sales across sectors, including automobiles, consumer durables, and e-commerce, among others. Further, Sitharaman said her Ministry would continuously work on further simplifying the Goods and Services Tax system.

She said Prime Minister Narendra Modi has been stressing the simplification of GST norms, rate cuts and product classifications. She said, ‘He (Prime Minister Narendra Modi) wanted to ensure that small traders should benefit from GST reforms, as it is they who take the products to the rural parts of the country.’

Moreover, she said ‘There have been several rounds of discussions and every time the prime minister has been extending all his support for the introduction of the next generation GST reforms. She stated as per his view, the rates have been reduced and the classifications of the products have been simplified. She added, ‘Now, there are only two rates -- 5% and 18% (as GST).’

Besides, talking to the 40% GST tax levied on some products, Sitharaman said, ‘Those products which are described as super luxury products are taxed at 40%. They are also called as SIN goods. For example, tobacco products like cigarettes come under this category.’

Earlier last week, the Finance Minister exuded confidence that the government would meet the fiscal deficit target of 4.4% of the GDP for the year ending March 2026. The Union Budget presented in Parliament in February by the Finance Minister had pegged the fiscal deficit at ₹15.69 lakh crore, or 4.4%, of the GDP in 2025-26 against 4.8% in 2024-25.

Sitharaman further said that from now onwards, the government's focus will be on the debt-to-GDP ratio. The central government's debt is estimated at 56.1% of the GDP in BE 2025-26, lower than 57.1% of GDP in RE 2024-25. Besides, she added ‘It is important for us and for achieving Viksit Bharat, we need to consciously be on the path of reforming and bringing in prudential fiscal management. That's the responsibility of every finance minister.’