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 a dual tax slab system of 5% and 18%, according to reports. Additionally, sin goods like tobacco and pan masala will face a 40% Goods and Services Tax, as per sources. The proposal has been reportedly sent to the GST Council for further deliberation and approval.
The dual tax slab system, if implemented, would simplify the current GST structure, which has four tax slabs – 5%, 12%, 18%, and 28%. The 5% slab would be applicable to essential commodities and services, while the 18% slab would cover most goods and services. The 40% slab, as mentioned, would be applicable to sin goods like tobacco and pan masala.
The proposal is expected to bring about a significant change in the way GST is levied and collected. The current GST structure has been criticized for being complex and for causing undue hardship to businesses and consumers alike. The dual tax slab system, on the other hand, is expected to reduce the complexity and make it easier for taxpayers to comply with the tax law.
The proposal is also expected to help in reducing the burden on the common man, as it would lead to a reduction in the prices of essential commodities and services. The 5% slab would ensure that essential items like food grains, medicines, and healthcare services remain affordable, while the 18% slab would cover most goods and services that are consumed by the common man.
The 40% slab for sin goods like tobacco and pan masala is expected to help in reducing the consumption of these harmful products. Tobacco and pan masala are known to be harmful to health, and the government has been trying to reduce their consumption through various measures. The 40% GST on these products would make them even more expensive, which is expected to reduce their demand.
The proposal has been welcomed by industry bodies and experts, who believe that it would help in simplifying the GST structure and reducing the burden on businesses and consumers. “The proposal is a step in the right direction,” said an expert. “It would simplify the GST structure and make it easier for taxpayers to comply with the tax law. The 40% slab on sin goods like tobacco and pan masala is also a welcome move, as it would help in reducing their consumption.”
However, some experts have expressed concerns about the proposal, saying that it may lead to a reduction in revenue for the government. “The proposal may lead to a reduction in revenue for the government,” said another expert. “The 5% and 18% slabs may not generate enough revenue to meet the government’s needs. The government may need to consider other measures to generate revenue.”
The proposal has been sent to the GST Council, which is expected to deliberate on it and take a final decision. The GST Council is a constitutional body that is responsible for making decisions on GST-related matters. The council consists of the Union Finance Minister, the State Finance Ministers, and other experts.
In conclusion, the government’s proposal to introduce a dual tax slab system of 5% and 18%, with sin goods like tobacco and pan masala facing a 40% GST, is a significant development. The proposal is expected to simplify the GST structure, reduce the burden on businesses and consumers, and help in reducing the consumption of harmful products. However, the proposal also has its challenges, and the government will need to carefully consider them before making a final decision.
