PM Modi Had Sought GST Reforms 8 Months Ago: Nirmala Sitharaman To News18 | Exclusive

Last Updated:September 05, 2025, 15:46 IST

FM Nirmala Sitharaman to CNN-News18: About eight months ago, PM Modi had called me once and had a long talk on how GST could be revamped

Finance Minister Nirmala Sitharaman said it was the first time the Centre had given a proposal to the GST Council. (File)

Finance Minister Nirmala Sitharaman, in an exclusive interview with Network18 Group Editor-in-Chief Rahul Joshi, said Prime Minister Narendra Modi had sought goods and services tax (GST) reforms eight months ago.

“The Prime Minister did announce it from the Red Fort on Independence Day. But even about eight months ago, he called me once and had a long talk on how GST can be revamped and looked at from the point of view of process and the tax rates for the common man. He asked me if there was a way in which we could make it simpler. I had agreed to come back to him," said Sitharaman.

“Around the budget, he reminded me and I assured him the work was progressing and I will come back to him. As the budget session was over, I said I was somewhere close to proposal on which he could guide me further. Much later, with the developments of April and Operation Sindoor, when the opportunity came I went for the discussion," said the FM.

FM Nirmala Sitharaman Exclusive Interview Live Updates HERE

“The PM said I want a simplified way of doing business so I don’t want small business sitting at computer getting their auditors to do it. And also, like the way we did in the budget, respecting the middle class, taxpayer, respecting people who are paying taxes out of their salaries…This tax touches the life of every citizen, so we need to be a lot more sensitive…We did it. Sharp focussed it and that is how the proposal came. It is the first time in GST Council’s history, the Centre has come up with a proposal…Till now it used to be the Group of Ministers…" she said.

“It is a first, in case of the compensation cess, where the MoS Finance was the chair to decide how to handle the closure, and a comprehensive proposal as regards GST given by the Central government. It is unique in very many ways. Every rule of the Council had to be looked at afresh even for the proposal. I am glad it went through the grind. It didn’t ignore any rule or expectation," she said.

Speaking from the Red Fort, PM Modi had said the reforms will rationalise tax slabs and reduce GST rates on essential and daily-use items.

The GST reforms

The GST Council has approved a new two-slab structure, scrapping the 12% and 28% brackets, easing rates on essentials, and imposing higher levies on select products.

Finance Minister Nirmala Sitharaman on Wednesday made big-bang announcements to ease tax burden on the common man, help businesses with GST refund reforms, and push overall consumption in the economy by cutting rates on daily-use items like ghee, butter, roti, shampoo, hair oil, and toothpaste, among others. Investors were keenly awaiting the decisions of the 56th meeting of the GST Council, as markets remained positive for a couple of days.

FMCG, healthcare, infra, small autos, farm & renewable infra stocks remained in focus on Thursday, as the government has significantly cut GST rates on these items. However, rates have been increased on tobacco, luxury vehicles, beverages, yachts, etc.

The GST Council cleared the Centre’s proposal to streamline the indirect tax structure into a dual slab of 5% and 18%, with a special 40% slab earmarked for sin and luxury goods. This overhaul will replace the existing four major slabs — 5%, 12%, 18%, and 28% — with a simplified two-rate system.

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