Govt Proposes 5% and 18% GST Slabs, Tobacco & Pan Masala at 40%: Reports
In a significant move, the Indian government has proposed a significant overhaul of the Goods and Services Tax (GST) structure, recommending two tax slabs of 5% and 18%, according to reports. The reports further reveal that sin goods like tobacco and pan masala will face a 40% GST. The proposal has been reportedly sent to the GST Council, paving the way for a major change in the country’s indirect tax regime.
The GST Council, a constitutional body consisting of representatives from the Centre and the states, has been deliberating on the proposal. The council’s recommendations will be crucial in shaping the future of India’s GST regime. The government’s proposal is aimed at simplifying the tax structure, reducing the burden on taxpayers, and increasing revenue.
The proposed 5% GST slab is expected to cover essential goods and services, such as food grains, medicines, and other daily necessities. This move is likely to provide relief to consumers, who have been facing the brunt of high taxes on essential items. The 18% GST slab is expected to cover goods and services that are not essential, but are still widely consumed.
The 40% GST slab for sin goods like tobacco and pan masala is a significant move, as it aims to discourage consumption of such products. The government has been trying to reduce the consumption of tobacco and pan masala, which are known to have adverse health effects. The increased tax rate is expected to reduce the demand for these products and increase revenue for the government.
The proposal has been welcomed by industry experts and economists, who believe that it will simplify the tax structure and increase transparency. “The proposed GST slabs are a welcome move, as they will simplify the tax structure and provide relief to consumers,” said an industry expert. “The increased tax rate on sin goods like tobacco and pan masala is also a good move, as it will help reduce their consumption and increase revenue for the government.”
However, some experts have expressed concerns about the impact of the proposal on small and medium-sized enterprises (SMEs). “The proposed GST slabs may not be beneficial for SMEs, which may face difficulties in adapting to the new tax structure,” said an expert. “The government should provide adequate support to SMEs to help them adapt to the new tax regime.”
The government has been working towards simplifying the GST structure, which has been complex and confusing for taxpayers. The current GST structure has multiple slabs, including 0%, 5%, 12%, 18%, and 28%. The proposal to reduce the number of slabs to two is expected to simplify the tax structure and reduce the burden on taxpayers.
The government has also been trying to increase revenue through the GST regime. The increased tax rate on sin goods like tobacco and pan masala is expected to increase revenue for the government. The government has also been trying to reduce tax evasion and improve compliance through the GST regime.
The proposal has been sent to the GST Council, which will deliberate on the issue and make recommendations to the government. The council’s recommendations will be crucial in shaping the future of India’s GST regime. The government is expected to implement the new GST structure soon, once the council’s recommendations are received.
In conclusion, the government’s proposal to simplify the GST structure by recommending two tax slabs of 5% and 18%, with sin goods like tobacco and pan masala facing a 40% GST, is a significant move. The proposal is expected to simplify the tax structure, reduce the burden on taxpayers, and increase revenue for the government. However, the government should also provide adequate support to SMEs to help them adapt to the new tax regime.
