Nirmala Sitharaman:'I Can't Say On September 22, I Will Be With A Stick'

'I am doing the drive in making sure that people pass this on. So the drive is not with distrust. The drive is just in case.'
'Just in case it doesn't get passed on, I am here.'

IMAGE: Finance Minister Nirmala Sitharaman speaks at Next-Gen GST Reforms in Kolkata, September 18, 2025. Photograph: ANI Photo

Days after the big-bang goods and services tax reform announcement, Union Finance Minister Nirmala Sitharaman, at her North Block office, spoke at length on a range of issues in an hour-long interaction with Business Standard's Asit Ranjan Mishra, Vikas Dhoot, Nivedita Mookerji and A K Bhattacharya.

Part two of a multi-part interview:

Part 1 of the Interview: 'I Won't Wait For Decades To Get Reform Done'

Many experts are saying the revenue forgone or loss will be around Rs 1.5 trillion to Rs 2 trillion, whereas the finance ministry's estimate is around Rs 48,000 crore (Rs 0.48 trillion).
So do you think it can go above your estimate?

We have given a number. And that's the number we think will be the case of revenue coming down in the immediate future. But with demand and consumption going up, it will be made up or offset immediately, I would think.

The offsetting will start immediately during the festive season itself.

And to a large extent, the number that we've shown and said in the Council, offsetting will happen this year itself.

You have also banned online real-money gaming, which was a big source of revenue. So have you factored that in also in this Rs 48,000 crore maths, or will that be above that?

Online gaming is not banned in total. We have banned playing with money. So GST having a category for online games is relevant.

But will that be a major source of revenue loss?

We don't know. We will have to see.

You have said that you'll be monitoring passing on of the rate rationalisation after September 22.
In the absence of an anti-profiteering body, is there an institutional mechanism to track this compliance?

Look at the anti-profiteering record. There were not even 300 (big) cases, right? With or without a mechanism, the idea is that you have to keep an eye.

You have to act if it is not getting passed on. That's what we'll be doing here.

Kindly note the image have only been published for representational purposes. Photograph: Miles Willis/Getty Images/Rediff Archives

Can you explain a bit on the monitoring drive and how it will work?

I am doing the drive now in making sure that people pass this on. So the drive is not with distrust. The drive is just in case. Just in case it doesn't get passed on, I am here.

So it's not as if I disbelieve or mistrust the industry. So my approach is one of trust with industry or trade.

And that's why they are already giving statements. We are talking to them, telling them to pass it on.

The intention is good. We want people to benefit. And if we are saying Viksit Bharat 2047, not much time is there.

People should come out, economy should be buoyant, robustness should be there, industry should invest.

Without doing all this, we can't aim to reach in another 20 years the level of development which is such an aspirational point for people.

So I start with the point of trust that industry will pass on the benefits. So I can't really say that on September 22, I will be sitting with a stick.

Trade-related uncertainty is the biggest risk to growth everywhere. And one is already seeing some adverse impact on employment. So what is the government's plan?

On the (US) tariff front, different departments are talking with their respective stakeholders.

I'm not sure the industry has arrived at a number yet of what is going to be the impact of that 50 per cent tariff for the exports going to the US.

An exporter doesn't set up a business saying I'm exporting only to the US.

He sets up a business to export.

A percentage of his export goes to the US, and it is that which is getting hit by 50 per cent.

So how is he going to be actually hit? How much, what is the extent to which he will be hit, are assessments which he has to make, which that industry will have to make.

Each industry will have to make for its own. And unless the industry tells its concerned ministry or department about the hit, the government cannot work out anything meaningful.

After all, the tariff came into effect on August 27.

We will have to get a figure and see.

Will the package that the government is working on come out soon?

Once these inputs (from industry) come.

Illustration: Dominic Xavier/Rediff

You are now saying that even for the inverted duty structure, 90 per cent of the entire refunds will happen automatically.
Do you have any game plan that the rest 10 per cent will also be refunded at some point in time?

No. At the moment, we are confident that this 90 per cent is done on the assumption that the majority of them are compliant.

And there are only a few black sheep who game the system. We don't want that sense of caution to affect everybody else's efficiency.

We said we'll give 90 per cent, and see for the rest. I would hold that 10 per cent a bit longer to make sure that I am not going to rush into something, and later, having to retract.

You have kicked off the GST appellate structure. Will it be a countrywide institution or will it start with some states, as it started with the IBC?

No, every state has minimum one or two tribunals even now as we begin, and the appellate authority will be in Delhi. Every state has decided on its own where they want it.

We have not interfered in the process. The group of officers who are working on execution, jurisdictional, case value, and so on, will submit the report in another 10 days, By the end of this month is when the rules and the operational guidelines will be in place.

The process will start off from October 1, but hearings will happen by November because there's so much of paperwork in between.

You have introduced faceless assessment in income tax. In GST, it is largely online, but the human face comes in. Is there a timeline you have in mind to make it faceless?

Ideally, it should become faceless, but I would wait for some time until everything settles down, particularly after this major decision.

Then, of course, we'll take everybody on board and decide how to do this because there is a State GST (SGST) component, a Central GST (CGST) component, and an Integrated GST (IGST) component.

Faceless will mean in all three cases, participation of both the states and the Centre in the faceless process. I want a stable, stabilised GST first...