Industry will pass on GST benefits to consumers, says Piyush Goyal

Commerce Minister Piyush Goyal confirms that industries will pass on the benefits of GST rate reductions to consumers and discusses plans to boost exports amid US tariff challenges

Union Commerce and Industry Minister Piyush Goyal on Thursday said that the industry has given the commitment to pass on the benefits of GST rate reductions to consumers.

  On Wednesday, the Goods and Services Tax (GST) Council chaired by Finance Minister Nirmala Sitharaman reached a consensus to move to a simplified two-tier rate structure, which included lower tax rates for several products. The new rates will take effect from September 22, the first day of Navratri.

 

The GST rate rationalisation measures are aimed at lowering costs, addressing duty-related distortions, and boosting competitiveness across diverse sectors such as paper, leather, wood, handicrafts, commercial vehicles, tractors, food processing, textiles, toys, and packaging materials.

   

The measures will help exporters directly impacted by the imposition of the steep 50 per cent tariff imposed by the United States (US) on Indian-origin products.

 

“Those who are directly facing stress right now, it will create more domestic opportunities for them,” Goyal told reporters in an interaction.

 

He also said greater demand in the domestic market-- due to the rate rationalisation and GST reforms -- will have an impact on the shortfall of exports to the US. That apart, India is also in talks with 50 other countries, who can take the products that India would like to sell, while also buying products from them.

 

The steep 50 per cent tariff imposed on India affects almost $49 billion worth of exports to the US or more than 55 per cent of India’s shipments to this market, according to the department’s calculations.

 

“This has been a special year for consumers. Income-tax benefits for salaried income earners and rate rationalisation and reform of the GST system is an unprecedented and a transformational step. It shows that the Indian economy is strong… this (GST reforms) will give a huge boost to domestic demand, have a multiplier impact on the economy. Our ability to create infrastructure faster will go up and with economies of scale helping Indian manufacturers become more productive, it will continue to keep inflation,” the minister said.

 

The government has also requested certain large retail chains to buy products from textiles exporters, who are not able to export it to the US due to the imposition of the high tariffs.

 

Goyal also said that the ₹2,250 crore Export Promotion Mission is ‘making fast progress’. “I should be in a position to go to the Union Cabinet soon,” he said.

 

Export Promotion Mission worth ₹2,250 crore was announced in the Union Budget in February for the current financial year, but has not been rolled out yet. Various schemes have been designed under the Mission to include World Trade Organization (WTO) compliant interventions, focusing on trade finance and making market access easier for exporters.

 

The minister also said that the measures announced by the GST Council will help all sections of the industry. The government is in continuous dialogue with the industry and is responsive to the problems that they are facing. The government will further unveil reforms to give relief on compliance burden.