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 sources, the proposal has also suggested slapping a 40% Goods and Services Tax on sin goods like tobacco and pan masala. The proposal has been reportedly sent to the GST Council, which is expected to take a final call on the new structure.
The current GST structure in India has four tax slabs – 5%, 12%, 18%, and 28%. However, the government has been looking to simplify the tax regime and reduce the number of slabs to make it more user-friendly and efficient. The proposed 5% and 18% slabs are expected to benefit consumers by reducing the overall tax burden.
The 5% slab is likely to be applicable to essential goods and services, such as food, healthcare, and education. The 18% slab, on the other hand, is expected to be used for non-essential goods and services, such as luxury items, fashion, and entertainment.
The proposal to increase the GST on tobacco and pan masala to 40% is likely to be a move to curb the consumption of these products, which are considered harmful to health. The government has been taking steps to reduce the consumption of tobacco and pan masala, and this move is expected to be a part of that initiative.
The proposal has been sent to the GST Council, which is a constitutional body responsible for making decisions on GST-related matters. The council is expected to take a final call on the new structure, and if approved, it will be implemented from April 1, 2024.
The GST Council has been meeting regularly to discuss and implement changes to the GST structure. The council has already made several changes to the GST structure since its inception in 2017. These changes have been aimed at simplifying the tax regime and reducing the number of slabs.
The proposed changes to the GST structure are expected to have a significant impact on the Indian economy. The reduction in the number of slabs is expected to reduce the complexity of the tax regime and make it easier for businesses to comply with tax laws. The increase in the GST on tobacco and pan masala is expected to reduce the consumption of these products and increase revenue for the government.
The government has been working towards simplifying the GST structure and reducing the number of slabs. In 2020, the government had proposed a three-slab GST structure, with rates of 8%, 12%, and 20%. However, the proposal was not implemented, and the government continued to work towards simplifying the tax regime.
The proposed changes to the GST structure are expected to benefit both consumers and businesses. Consumers will benefit from the reduction in the number of slabs and the lower tax rates. Businesses will benefit from the simplification of the tax regime and the reduction in compliance costs.
The government has been working towards reducing the number of slabs and simplifying the GST structure. The proposed 5% and 18% slabs are expected to be a step in the right direction. The increase in the GST on tobacco and pan masala is expected to be a move to curb the consumption of these products and increase revenue for the government.
In conclusion, the government has proposed an overhaul of the GST structure, recommending two tax slabs of 5% and 18%. The proposal has also suggested slapping a 40% GST on sin goods like tobacco and pan masala. The proposal has been sent to the GST Council, which is expected to take a final call on the new structure. The changes are expected to benefit both consumers and businesses and simplify the tax regime.
News Source:
https://x.com/PTI_News/status/1956324453438406706
