Govt proposes 5% and 18% GST slabs, tobacco & pan masala at 40%: Reports
The Goods and Services Tax (GST) structure in India is set to undergo a significant overhaul, with the government proposing two tax slabs of 5% and 18%, as reported by government sources. This move is aimed at simplifying the tax system and making it more effective. Additionally, sin goods like tobacco and pan masala will face a higher GST rate of 40%. The proposal has been sent to the GST Council for consideration.
The current GST structure has multiple tax slabs, including 5%, 12%, 18%, and 28%. The proposal to reduce the number of tax slabs to two is expected to ease the burden on taxpayers and reduce the complexity of the tax system. The 5% GST slab is likely to be applicable to essential goods and services, such as food, medicine, and education, which are critical to the daily lives of citizens. The 18% GST slab, on the other hand, is expected to cover a broader range of goods and services, including consumer durables, automobiles, and construction materials.
The proposal to increase the GST rate on tobacco and pan masala to 40% is aimed at discouraging their consumption and promoting a healthier lifestyle. These products are considered harmful to health and have been linked to various health problems, including cancer, heart disease, and respiratory issues. By increasing the GST rate on these products, the government hopes to reduce their demand and encourage consumers to opt for healthier alternatives.
The move to simplify the GST structure and increase the tax rate on sin goods is expected to have a significant impact on the economy. On the one hand, it is expected to reduce the complexity of the tax system and make it easier for taxpayers to comply with tax laws. On the other hand, it is expected to increase the tax burden on consumers, particularly those who consume tobacco and pan masala products.
The proposal to increase the GST rate on tobacco and pan masala products is also expected to have a significant impact on the industries that manufacture and distribute these products. The tobacco and pan masala industries are significant contributors to the country’s economy, and any increase in the GST rate is expected to affect their profitability. However, the government’s move is aimed at promoting a healthier lifestyle and reducing the burden on the healthcare system, which is expected to benefit society as a whole.
The proposal to simplify the GST structure and increase the tax rate on sin goods is also expected to have a significant impact on the fiscal health of the government. The government is expected to receive additional revenue from the increased GST rate on tobacco and pan masala products, which can be used to fund public welfare programs and infrastructure development projects.
In conclusion, the government’s proposal to simplify the GST structure and increase the tax rate on sin goods like tobacco and pan masala is a significant step towards promoting a healthier lifestyle and reducing the complexity of the tax system. While the proposal is expected to have a significant impact on the economy and industries that manufacture and distribute these products, it is expected to benefit society as a whole by promoting a healthier lifestyle and reducing the burden on the healthcare system.
