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 sources, the proposal has been sent to the GST Council, which is expected to take a final call on the matter. Additionally, the reports suggest that sin goods like tobacco and pan masala will face a higher GST rate of 40%.
The GST Council, comprising of Centre and state finance ministers, is the apex body responsible for making decisions on GST-related matters. The council has been working towards simplifying the GST structure, which has been criticized for being complex and confusing to taxpayers.
The proposed 5% GST slab is expected to cover most goods and services, including food items, clothing, and household appliances. This rate is likely to be lower than the current GST rates, which range from 5% to 28%. The 18% GST slab, on the other hand, may cover goods and services that are considered to be luxury items or have a high profit margin.
The 40% GST rate for sin goods like tobacco and pan masala is aimed at reducing their consumption and revenue generation. The Indian government has been cracking down on the sale of these products, especially among minors and in public places. The higher GST rate is expected to increase the cost of these products, making them less attractive to consumers.
The proposal has been welcomed by industry experts, who believe that it will simplify the GST structure and make it easier for taxpayers to comply with the law. “The proposed GST slabs are a step in the right direction,” said a leading industry expert. “The current GST structure is complex and confusing, and the proposed slabs will make it easier for businesses to comply with the law.”
However, some experts have raised concerns about the impact of the higher GST rate on tobacco and pan masala manufacturers. “The higher GST rate will increase the cost of production for these manufacturers, which may lead to job losses and revenue losses for the government,” said a leading economist.
The government has been working to simplify the GST structure since its rollout in 2017. The GST Council has made several changes to the law, including the introduction of a reverse charge mechanism and the abolition of the 1% additional tax on inter-state supplies.
The proposal is expected to be discussed at the next GST Council meeting, which is scheduled to take place later this month. The council is expected to take a final call on the proposal, which will then be implemented.
In conclusion, the proposed GST slabs of 5% and 18% are a step in the right direction towards simplifying the GST structure. The higher GST rate for sin goods like tobacco and pan masala is a welcome move aimed at reducing their consumption and revenue generation. The proposal is expected to be discussed at the next GST Council meeting, and its implementation will depend on the council’s final decision.
News Source:
https://x.com/PTI_News/status/1956324453438406706
