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 government has also suggested imposing a higher GST of 40% on so-called “sin” goods like tobacco and pan masala.
The proposal, which has been reportedly sent to the GST Council, aims to simplify the current GST structure, which has been criticized for being overly complex and leading to confusion among taxpayers. The current GST structure consists of multiple slabs, including 0%, 5%, 12%, 18%, and 28%, with additional cesses on certain goods and services.
The proposed 5% GST slab is expected to cover most essential goods and services, including foodstuffs, medicines, and other daily necessities. The 18% slab, on the other hand, is likely to cover a wider range of goods and services, including manufactured goods, services, and discretionary items.
The proposal to impose a higher GST of 40% on tobacco and pan masala is aimed at discouraging consumption of these products, which are considered harmful to health. The move is also expected to generate additional revenue for the government, which can be used to fund public health initiatives and other social welfare programs.
The reports citing government sources suggest that the proposal has been sent to the GST Council, which is expected to discuss and finalize the new GST structure. The council consists of representatives from the Centre, states, and union territories, and is responsible for making decisions on GST-related matters.
The proposal to simplify the GST structure and increase the tax rates on tobacco and pan masala is likely to be welcomed by many experts and stakeholders. The current GST structure has been criticized for being overly complex and leading to confusion among taxpayers, which has resulted in a significant decline in GST revenue in recent years.
Simplifying the GST structure is expected to make it easier for taxpayers to comply with the law and reduce the burden on the government’s revenue collection machinery. The proposal to increase the tax rates on tobacco and pan masala is also expected to have a positive impact on public health, as it will discourage consumption of these products and generate additional revenue for the government.
However, the proposal is also expected to face resistance from certain stakeholders, including industry bodies and traders who are likely to oppose any increase in tax rates. The opposition is expected to argue that the proposed tax rates are too high and will lead to increased costs for consumers and businesses.
In conclusion, the government’s proposal to simplify the GST structure and increase the tax rates on tobacco and pan masala is a significant development that is expected to have far-reaching implications for the economy and public health. While the proposal has its advantages, it is also expected to face resistance from certain stakeholders. The outcome of the proposal will depend on the government’s ability to balance the needs of different stakeholders and ensure that the new GST structure is fair, equitable, and effective.
