The Central Government has proposed major changes in the slab of ‘Goods and Services Tax’ (GST). Under this, two tax slabs of 5% and 18% have been recommended, while 40% GST has been proposed on threats to health such as tobacco and paan masala. According to government sources, the proposal has been sent to the GST Council, which will hold a two -day meeting to finalize changes in GST slabs in September.
On the occasion of Independence Day, Prime Minister Narendra Modi announced the implementation of GST reforms of the next generation till Diwali in his address to the nation from the Red Fort. He said, ‘I am going to give a big gift on this Diwali. In the last eight years, we implemented major reforms like GST and made the country’s taxation system easier. Now the time has come for its review. We have discussed with the states and now we are going to implement the GST reforms of the next generation.
At present, the government has placed four slabs in GST
According to sources, GST reforms proposed by the government include lack of taxes on agricultural products, health goods, handicrafts and insurance. The government believes that this will boost consumption and will speed up economic growth. Currently, GST has five main slabs – 0%, 5%, 12%, 18%and 28%. GST has 12% and 18% slab normal rates, which include most of the objects and services. The proposed reforms include removing 12% slab and adjusting items under it to 5% and 18% slabs.
Prime Minister Modi said in his address that improvement in GST will be a gift of Diwali from the government for the countrymen. There will be a significant decrease in taxes imposed on services necessary for people. MSME will benefit, everyday things will be cheaper and this will also speed up the country’s economy. Sources said that after improvement in GST slab, essential services like health and life insurance can be more economical.
New GST rates will be implemented before Diwali!
The government believes that reducing GST rates on daily use items and essential services may have a temporary impact on revenue, but it will be compensated by increasing consumption in a long time. The proposed slab will be decided at the GST Council meeting to be held in September. The government aims to implement GST reforms before Diwali.
