Govt proposes 5% and 18% GST slabs, tobacco & pan masala at 40%: Reports
The Indian government has reportedly proposed a significant overhaul of the Goods and Services Tax (GST) structure, recommending two tax slabs of 5% and 18%. According to reports, the proposal has been sent to the GST Council, which is expected to deliberate on the matter soon. Additionally, the reports suggest that sin goods like tobacco and pan masala will face a 40% GST.
The proposed GST structure is a significant departure from the current four-slab system, which has been in place since the introduction of GST in 2017. The current slabs are 5%, 12%, 18%, and 28%, with cesses on certain items.
The 5% slab is expected to cover essential goods and services, including food, medicines, and housing. This move is likely aimed at reducing the tax burden on common citizens and businesses. The 18% slab, on the other hand, is expected to cover general goods and services, including manufactured goods, services, and other commodities.
The proposal to increase the GST rate on sin goods like tobacco and pan masala to 40% is aimed at discouraging their consumption and reducing the harm they cause to public health. The tobacco industry has been a significant source of revenue for the government, but it has also been linked to various health problems, including cancer, heart disease, and respiratory diseases.
The proposal has been received positively by experts and industry players, who believe that it will simplify the GST regime and reduce the tax compliance burden on businesses. “The proposal to reduce the number of GST slabs from four to two will simplify the tax regime and reduce the complexity of tax compliance for businesses,” said Praveen Agarwal, a tax expert. “The increased rate on sin goods will also help to reduce their consumption and promote public health.”
However, some experts have raised concerns about the potential impact of the proposal on the economy. “The increased rate on sin goods may lead to a reduction in their consumption, but it may also lead to a loss of revenue for the government,” said Rakesh Agrawal, a economist. “The government needs to carefully consider the potential impact of the proposal on the economy before implementing it.”
The proposal is expected to be discussed and debated by the GST Council, which consists of representatives from the Centre and states. The council will need to agree on the proposal before it can be implemented. The government has not yet announced a timeline for the implementation of the proposal, but it is expected to be implemented in the near future.
In conclusion, the government’s proposal to overhaul the GST structure and increase the rate on sin goods is a significant step towards simplifying the tax regime and promoting public health. While there are concerns about the potential impact of the proposal on the economy, it is expected to benefit the common citizen and businesses in the long run.
