Govt proposes 5% and 18% GST slabs, tobacco & pan masala at 40%: Reports
The Goods and Services Tax (GST) has been a bone of contention for the Indian economy since its inception in 2017. The government has been trying to fine-tune the tax structure to make it more efficient and equitable. Recent reports suggest that the government has proposed a significant overhaul of the GST structure, recommending two tax slabs of 5% and 18%. Additionally, sin goods like tobacco and pan masala will face a 40% GST. The proposal has been reportedly sent to the GST Council for consideration.
The 5% and 18% GST slabs are expected to replace the existing four tax slabs of 5%, 12%, 18%, and 28%. The new structure is aimed at simplifying the tax system and making it more transparent. The 5% slab is likely to cover essential goods such as food items, healthcare products, and education services. The 18% slab is expected to cover a wide range of goods and services, including electronics, clothing, and automobiles.
The proposal to increase the GST on tobacco and pan masala to 40% is part of the government’s effort to curb the consumption of these sin goods. Tobacco products are known to be harmful to health, and the government has been trying to reduce their consumption to minimize the impact on public health. Pan masala, on the other hand, is a significant contributor to oral cancer and other health problems. The increased GST on these products is expected to make them more expensive, thereby reducing their demand.
The proposal has been reportedly sent to the GST Council, which is a constitutional body comprising representatives from the centre and the states. The council is responsible for making decisions on GST-related matters. The proposal is expected to be discussed and approved by the council in the coming weeks.
The government’s decision to propose a new GST structure is aimed at addressing some of the key issues that have been plaguing the tax system. One of the main issues is the complexity of the existing tax structure, which has made it difficult for taxpayers to comply with the GST laws. The new structure is expected to simplify the tax system and make it more transparent, thereby reducing the compliance burden on taxpayers.
Another issue that the government is trying to address is the issue of tax evasion. The existing GST structure has been plagued by tax evasion, which has resulted in significant revenue losses for the government. The new structure is expected to address this issue by making it easier to track and monitor GST payments.
The proposal has been welcomed by many experts, who believe that it will help to simplify the tax system and make it more transparent. “The proposal to reduce the number of GST slabs is a welcome move,” said Chartered Accountant, Rakesh Agrawal. “It will simplify the tax system and make it easier for taxpayers to comply with the GST laws.”
However, not everyone is pleased with the proposal. Some experts believe that the new structure may lead to higher prices for consumers. “The increased GST on essential goods will lead to higher prices for consumers,” said economist, Jayanthi Desai. “The government needs to be careful while implementing the new structure to ensure that it does not negatively impact the common man.”
In conclusion, the government’s proposal to overhaul the GST structure is a significant step towards simplifying the tax system and making it more transparent. The two tax slabs of 5% and 18% are expected to replace the existing four slabs, and sin goods like tobacco and pan masala will face a 40% GST. The proposal has been sent to the GST Council for consideration and is expected to be implemented in the coming weeks.
