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Govt proposes 5% and 18% GST slabs, tobacco & pan masala at 40%: Reports
The Indian government has proposed a significant overhaul of the Goods and Services Tax (GST) structure, recommending two tax slabs of 5% and 18%, according to reports quoting government sources. The reports also suggest that sin goods like tobacco and pan masala will face a higher GST rate of 40%. The proposal has been reportedly sent to the GST Council for further discussion and implementation.
The proposed two-tier GST structure is aimed at simplifying the current tax regime, which has been criticized for its complexity and multiple slabs. The 5% GST slab is likely to be applicable to essential commodities and daily essentials, while the 18% slab will cover most goods and services. The reports suggest that the government is looking to reduce the tax burden on consumers and promote economic growth.
One of the significant changes proposed is the hike in the GST rate on sin goods like tobacco and pan masala. The current GST rate on these products is 28%, but the government has proposed to increase it to 40%. This move is aimed at discouraging consumption of these harmful products and promoting a healthier lifestyle.
The proposal has been sent to the GST Council, which is a constitutional body responsible for making decisions on GST rates and policies. The council has representatives from the Centre and states, and its decisions are binding on all states.
The GST was introduced in India in 2017 with the aim of creating a single national market and promoting economic growth. The current GST regime has four tax slabs – 5%, 12%, 18%, and 28%. However, the government has been looking to simplify the regime and reduce the number of slabs.
The proposal has been welcomed by many experts who say that it will simplify the GST regime and reduce the tax burden on consumers. “The proposed two-tier GST structure is a welcome move, as it will simplify the tax regime and reduce the complexity for businesses and consumers,” said Dr. Ashok Shah, a tax expert.
However, some experts have raised concerns about the impact of the proposed changes on the economy. “The increase in GST rate on sin goods like tobacco and pan masala may lead to a decline in their sales, but it may also lead to job losses and economic losses,” said Dr. Shah.
The government has not yet made any official announcement on the proposed changes, and it is expected to take some time before the new GST rates are implemented. However, the proposal has sparked a debate on social media, with many people welcoming the move and others expressing concerns about its impact on the economy.
In conclusion, the proposed two-tier GST structure and the hike in GST rate on sin goods like tobacco and pan masala are significant changes that are aimed at simplifying the tax regime and promoting economic growth. While the proposal has been welcomed by many experts, it also has its critics who are concerned about its impact on the economy. Only time will tell whether these changes will be implemented and what their impact will be on the economy and consumers.
