GST rate cuts will boost economy, says deputy CM

Patna: Deputy CM Samrat Choudhary on Thursday said the recent GST rate cuts, despite causing an estimated revenue loss of up to Rs 40,000 crore, would provide a “booster dose” to the economy and major relief to the “aam aadmi”.“It is a market and sales improve a lot by reducing the taxes,” Choudhary said, defending the decision to lower GST on Indian bidi even though cigarettes and other tobacco products remain in the 40% exceptional tax slab. “Mainly the poor people are engaged in Indian bidi production,” he added.The deputy CM, who also holds the finance portfolio, thanked Union finance minister Nirmala Sitharaman for accepting his proposals as chairman of the Group of Ministers on GST rationalisation.

“It is a matter of pride for Bihar. If the country’s economy booms, Bihar will have an important role. PM Narendra Modi has taken a step further the Swadeshi movement launched by Mahatma Gandhi,” he said.He described the rate cuts as “a strong step towards the resolution of Prime Minister Narendra Modi to develop India by 2047”. “This is a big and solid step towards making India economically self-reliant and promoting indigenous production,” Choudhary said.

The deputy CM said the GST Council accepted recommendations to cut rates on basic necessities. “We had recommended a zero GST rate to make health and life insurance more accessible. Also, keeping in mind roti, kapda and makaan, a proposal was made to cut GST rates on many items. All these recommendations were approved, which will directly provide relief to the general public,” he said.Choudhary also defended the rate cut on defence equipment.

“The country may have to fight another war,” he remarked. Simplifying the slab structure, he said, GST has now been consolidated into two categories of 12% and 5%, while several essential commodities have been exempted. “Now GST will not have to be paid on purchasing any type of roti. It was earlier 18% on paratha,” he said.He explained that earlier 28%, 18%, 12% and 5% tax was levied on a range of goods including roti, oil, namkeen, textiles, tractors, hand pumps, renewable energy equipment, educational material, razors, milk bottles, electronic goods, transport, sports goods, wood products, defence sector items, footwear, construction materials, handicrafts and employment-related items.

“Now all these have been reduced to only 12% and 5%, while GST on many essential commodities has been completely made zero,” he said.Responding to opposition claims that the rate cuts were timed to influence the Bihar polls, Choudhary dismissed the charge. “Elections are held every six months. It will be West Bengal and then Assam after Bihar polls this year. If the opposition leaders want to pay higher taxes, they are welcome.

That’s why PM Narendra Modi advocates for ‘one nation, one tax and one nation, one election’,” he said.Taking a swipe at RJD chief Lalu Prasad, he said, “Had Lalu any understanding of finance, he would not have been jailed and the Bihar economy would have boomed during their 15 years regime. It is a matter of pride that even RJD leaders like Lalu Prasad are discussing financial matters.”The opposition, however, was critical. RJD spokesperson Ejya Yadav said the cuts would not benefit consumers. “They will increase the base price of the products and consumers will have to pay the same price despite the tax rate cut,” she said. Congress leader Shakeel Ahmad Khan also questioned the timing. “Why the govt did not cut the rates earlier?” he asked.Choudhary countered that opposition leaders frequently criticised higher GST slabs but ignored VAT reductions in states ruled by them.