Budget 2020: GST rate cuts help households save 4% of monthly spending1 min read . Updated: 01 Feb 2020, 11:39 AM IST
- GST helped logistics and transport sector immensely
- Seeks to build an inclusive society that takes care of weak and vulnerable
New Delhi: Goods and Services Tax (GST) rate cuts have led to an annual benefit of ₹1 trillion to consumers, enabling households to save as much as 4% of their monthly spending, finance minister Nirmala Sitharaman said in her Union Budget speech for 2020-21.
The minister, who started her speech promising to address aspirations of the youth, said the Budget for FY21 seeks to build an inclusive society that takes care of the weak and the vulnerable. She said boosting income and enhancing purchasing power of people would need a higher economic growth rate which will ensure that the youth are gainfully employed.
The Economic Survey on Friday estimated the Indian economy to grow at 6-6.5% in 2020-21, and urged the government to use its strong mandate to deliver expeditiously on reform measures.
For the current financial year, the statistics ministry has estimated the economic growth to decelerate to a six-year low of 5%.
“GST has matured and has integrated the country economically by subsuming numerous taxes into one and has helped in the formalization of economy," said Sitharaman. “The effective tax rate on every commodity came down substantially", the minister said, adding that the overall benefit of ₹1 trillion to consumers works out to a 10% reduction in tax incidence on goods and services which equals a 4% reduction in monthly spending of households.
Sitharaman said GST has helped the logistics and transport sector immensely. “The turnaround time of trucks got reduced, the dreaded inspector raj vanished," she said.
Central and state governments collected about ₹1.11 trillion in Goods and Services Tax (GST) in January, the second highest monthly collection since the GST roll out, an official statement from the finance ministry said earlier in the morning. This is also the third straight month of GST receipts crossing the ₹1 trillion mark.