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) regime, the government has proposed an overhaul of the tax structure, recommending two tax slabs of 5% and 18%, according to reports. The reports further stated that sin goods like tobacco and pan masala will face a hefty 40% GST.
The proposal, which has been reportedly sent to the GST Council, is a significant departure from the current four-tier GST structure of 5%, 12%, 18%, and 28%. The move is likely to have a significant impact on various industries, including manufacturing, real estate, and services.
The 5% GST slab is expected to cover essential goods and services, such as food, medicines, and public transportation. This move is likely to benefit consumers and reduce the burden of taxes on essential items. On the other hand, the 18% GST slab is expected to cover a wide range of goods and services, including electronics, clothing, and home appliances.
The 40% GST slab, on the other hand, is expected to cover sin goods like tobacco and pan masala. This move is aimed at reducing the consumption of these harmful products and generating additional revenue for the government. The higher GST rate on these goods is also likely to encourage consumers to opt for alternative products.
The proposal has been welcomed by industry experts, who have long been calling for a simplification of the GST regime. “The proposed GST structure is a step in the right direction,” said Dr. Ashish Kumar, a leading economist. “The 5% and 18% slabs will help to reduce the complexity of the GST regime and make it more predictable for businesses.”
However, not everyone is pleased with the proposal. Some industry experts have expressed concerns about the impact of the higher GST rate on sin goods on small and medium-sized enterprises (SMEs). “The higher GST rate on sin goods may put additional pressure on SMEs, which are already struggling to stay afloat,” said Rohit Jain, a spokesperson for the Confederation of Indian Industry (CII).
The proposal is also likely to have an impact on the government’s revenue. The higher GST rate on sin goods is expected to generate additional revenue for the government, which can be used to fund various development projects. On the other hand, the reduction in GST rates on essential goods and services is expected to reduce the government’s revenue.
The proposal is expected to be discussed by the GST Council in its next meeting, which is scheduled to take place in the coming weeks. The council, which is chaired by the Union Finance Minister, is responsible for making decisions on GST rates and other related matters.
In conclusion, the government’s proposal to overhaul the GST structure and introduce two tax slabs of 5% and 18% is a significant move aimed at simplifying the tax regime and reducing the burden on businesses and consumers. The proposal is expected to have a significant impact on various industries and is likely to be discussed by the GST Council in its next meeting.
