Finance Minister Nirmala Sitharaman, in an exclusive conversation with India Today, dismissed claims that the Centre’s sweeping Goods and Services Tax (GST) overhaul was linked to U.S. President Donald Trump’s tariff moves against India. She clarified that the reforms had been in preparation for over a year and a half, long before the imposition of steep U.S. tariffs, and were driven by domestic economic considerations rather than international pressures.
Her statement came in response to growing speculation from experts and Opposition leaders, including former Finance Minister P. Chidambaram, who suggested that Trump’s tariff war may have influenced the sudden pace of reforms. Chidambaram pointed to multiple possible triggers, such as sluggish economic growth, rising household debt, declining savings, upcoming Bihar elections, and global trade tensions. He remarked that “all of the above” may have contributed to the timing of the government’s announcement.
Sitharaman, however, firmly rebutted this narrative. She criticised Opposition leaders for being “misinformed” and urged them to “do their homework” before making allegations. She argued that the government did not arbitrarily impose high GST rates in the past, explaining that the earlier structure had been carried over from the pre-GST taxation system that was designed and implemented under previous regimes. She further accused past governments of failing to build consensus, stating that GST could have been introduced as far back as the 1960s but was repeatedly delayed due to a lack of trust from states and ineffective leadership.
In a sharp attack, Sitharaman reminded critics that the Congress-led UPA had over seven decades to implement GST but failed to act, while the present government had delivered the reforms in just two years. “Call it ten years late or eight years late, that’s fine,” she said, adding that Opposition leaders should reflect on their failures before questioning the present government’s achievements.
The reforms approved by the 56th GST Council meeting mark the biggest revamp of the indirect tax regime since its rollout in 2017. The Council agreed to abolish the 12 per cent and 28 per cent slabs and introduce a simplified two-tier structure of 5 per cent and 18 per cent. In addition, a new 40 per cent slab has been introduced for sin and luxury goods. However, tobacco and cigarettes will continue under the 28 per cent bracket with an additional compensation cess until pending loans are cleared. The new structure will take effect on September 22, coinciding with the beginning of Navaratri.
By distancing the reforms from international developments and positioning them as a long-planned domestic measure, Sitharaman sought to underline the government’s focus on structural tax simplification, revenue stability, and consumer confidence, while simultaneously discrediting the Opposition’s attempts to politicise the timing of GST 2.0.
