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NSE Managing Director and CEO Ashishkumar Chauhan on Thursday welcomed the government’s decision to simplify the Goods and Services Tax (GST) structure, saying that lower tax rates will leave more money in the hands of people, who will spend more, thereby creating a virtuous cycle for the economy. 

Chauhan congratulated Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman for the "historic" decision to reduce GST slabs from four to just two.

"Reasonable taxes will ensure better compliance and reduce tax evasion. This reform will boost overall economic activity in the country," he said.

The NSE chief added that the decision would not only simplify the system but also pave the way for India to grow at over 8 per cent GDP in the coming years.

“I have always believed that reasonable taxes would ensure that tax compliance increases and the tax avoidance or tax evasion reduces drastically. So, overall reduction of rates reducing the complexity which has been now decided,” Chauhan stated.

He recalled that the introduction of GST in 2017 was itself a landmark move, and the latest rationalisation would further strengthen India’s economic growth story.

“In fact, the GST introduction in 2017 itself was a historic move and this particular decision now is going to go a long way in ensuring that India is able to now go about 8 per cent plus GDP growth rate going forward," he added.

Meanwhile, on Wednesday, the GST Council, chaired by Finance Minister Nirmala Sitharaman, scrapped the 12 per cent and 28 per cent rates, retaining only the 5 per cent and 18 per cent slabs.

The new structure will come into effect from September 22.

As part of the changes, the tax rate on personal care items such as hair oil, shampoo, toothpaste, and dental floss has been reduced from 18 per cent to 5 per cent.

Packaged snacks like namkeens, bhujia, mixtures, and chabena have also been moved to the 5 per cent slab from the earlier 12 per cent.