Govt proposes 5% and 18% GST slabs, tobacco & pan masala at 40%: Reports
In a significant move aimed at simplifying the Goods and Services Tax (GST) structure, the government has reportedly proposed two tax slabs of 5% and 18%. According to reports, the proposal has been sent to the GST Council, which is expected to review and finalize the new structure. The development comes as the government looks to address the complexities and concerns faced by businesses and taxpayers under the current GST regime.
Under the proposed structure, most goods and services will fall under the 5% and 18% slabs, with a few exceptions. Sin goods like tobacco and pan masala, which are considered harmful to public health, will face a higher GST rate of 40%. This move is seen as a step towards discouraging consumption of these products and generating additional revenue for the government.
The proposal has been welcomed by many, including industry experts and analysts, who believe that a simpler GST structure will lead to increased compliance and reduced administrative burdens. “A dual GST slab structure is a step in the right direction, as it will simplify the tax system and reduce the complexity that businesses face,” said Rakesh Nangia, Partner at Nangia & Co.
The current GST regime, which was introduced in 2017, has been plagued by issues such as a high number of tax slabs, multiple rates for the same goods, and a complex valuation methodology. The government has been working to address these issues and make the GST system more efficient and taxpayer-friendly.
The 5% slab is likely to include essential goods and services such as food, healthcare, and education, which are considered critical for the well-being of citizens. This move is expected to benefit the common man, as it will reduce the burden of taxes on these essential goods and services.
The 18% slab, on the other hand, is likely to include goods and services that are not considered essential, such as luxury items and discretionary spending. This move is expected to generate additional revenue for the government, which can be used to fund public programs and initiatives.
The proposal to impose a higher GST rate of 40% on sin goods like tobacco and pan masala is seen as a step towards discouraging consumption of these products. Tobacco and pan masala are considered harmful to public health, and their consumption is linked to various health problems, including cancer, heart disease, and lung disease.
The government has been working to reduce the consumption of these products, and the higher GST rate is seen as a step in that direction. The revenue generated from the higher GST rate will be used to fund public health programs and initiatives aimed at promoting healthy living.
While the proposal has been welcomed by many, some industry experts have raised concerns about the potential impact on businesses. “A higher GST rate will increase the burden on businesses, particularly small and medium-sized enterprises (SMEs), which may struggle to absorb the additional costs,” said Sandeep Jajodia, CEO at Jajodia & Associates.
The government has been working to address the concerns of businesses and is expected to provide relief and support to SMEs to help them adjust to the new GST structure. The government has also been working to simplify the GST return filing process and reduce the compliance burden on businesses.
In conclusion, the government’s proposal to simplify the GST structure by introducing two tax slabs of 5% and 18% is a step in the right direction. The move is expected to benefit the common man, reduce the complexity of the tax system, and generate additional revenue for the government. The proposal to impose a higher GST rate on sin goods like tobacco and pan masala is also a step towards promoting healthy living and reducing the consumption of these harmful products.
