Union Finance Minister Nirmala Sitharaman, speaking at the joint conclave of Trade and Industries Association in Chennai on September 14, 2025, highlighted the transformative impact of the GST regime on both people and State governments. Addressing the theme “Tax Reforms for Rising Bharat”, she said the latest GST 2.0 reforms have significantly reduced rates, with 99% of goods earlier in the 12% bracket now brought under the 5% bracket.
GST Reforms Boost Compliance, Revenue, and Citizen Savings
She explained that these rate cuts, ranging between 10-13%, directly benefit India’s 140 crore citizens by reducing expenses and enabling greater disposable income. Sitharaman expressed confidence that companies would pass on these savings to consumers. She noted that the GST taxpayer base has grown from 65 lakhs in 2017 to 1.51 crore today, reflecting greater compliance and inclusion.
On revenue, the Finance Minister stated that gross GST collections have surged from ₹7.19 lakh crore in 2017 to ₹22 lakh crore at present. Monthly GST collections now average between ₹1.9 lakh crore and ₹2 lakh crore, equally shared between the Centre and States. From the Centre’s share of ₹90,000 crores, 41% is devolved to States, ensuring balanced fiscal federalism.
GST 2.0 Brings Simplification, Wider Benefits, and Mixed Industry Reactions
Sitharaman said nearly eight months of extensive work went into preparing GST 2.0 reforms with active cooperation from State Finance Ministers. Over 350 items have seen rate reductions, GST registration has been simplified to a three-day process, and classification issues have been resolved. Food items are now uniformly taxed at either 5% or 0%, eliminating confusion arising from varied court rulings. Refund mechanisms have also been made easier.
She added that these reforms, along with personal income tax cuts and the new Income Tax Act, were implemented within just eight months. The guiding principles were ensuring relief in daily-use items, benefiting poor and middle-class households, reducing input costs for MSMEs, aiding farmers, and boosting growth sectors of the economy. Industry leaders such as A.R. Unnikrishnan (CII Tamil Nadu) and G.S.K. Velu (FICCI) welcomed the reforms, calling them timely and growth-oriented. However, challenges were also raised. Hindustan Chamber of Commerce flagged the GST hike on paper and paperboard to 18% as a shock, while also seeking rationalisation for coastal shipping and inland water transport. Tamil Nadu Traders Association highlighted harassment by GST officials and demanded a settlement scheme for past dues.
Summary:
Union Finance Minister Nirmala Sitharaman highlighted GST 2.0 reforms, reducing most goods from 12% to 5%, benefiting 140 crore citizens. GST collections rose to ₹22 lakh crore with broader compliance. Reforms simplified registration, refunds, and classifications. Industry welcomed changes, though concerns emerged over paper GST hikes and trader harassment.
