The government has taken a big step towards simplifying the tax system. The proposal of the Central Government to abolish the 12% and 28% GST slabs has now been approved by the GoM. This means that now both these slabs will be abolished and only 5% and 18% slabs will remain.
The government is preparing to simplify the GST (Goods and Services Tax) system further. Recently, a GoM meeting was held in which a consensus was reached to make the GST slabs proposed by the Centre reasonable. In this meeting, the finance ministers of the states have supported reducing the existing four slabs to only two slabs. This means that now the slabs of 12% and 28% will be abolished and only the slabs of 5% and 18% will remain.
Now there will be only two GST slabs?
This six-member group headed by Bihar Deputy Chief Minister Samrat Chaudhary has decided that GST rates will be divided into only two slabs. In this, a rate of 5% will be applicable on good and essential goods, while most standard goods and services will be taxed at 18%. Apart from this, luxury goods will be in the 40% slab.
After this decision, about 99% of the items which were earlier taxed at 12% will now come under the 5% slab. On the other hand, about 90% of the items which were earlier taxed at 28% will be taxed at 18%. This will make the tax system more simple and clear, which will benefit the common people as well as the traders.
The GoM has also suggested that luxury cars should be taxed at the rate of 40%. Along with this, some harmful items will also be kept in this slab. The finance ministers of Uttar Pradesh, Rajasthan, West Bengal, Karnataka and Kerala in the GoM have also supported this proposal. They said that this will bring transparency in the tax system and the number of tax payers will increase.
Statement of Finance Minister Nirmala Sitharaman
Finance Minister Nirmala Sitharaman said in this meeting that the general public will benefit by making tax rates reasonable. She said that this new system will make the tax system simple and transparent. She also said that this will reduce the tax rate on many goods, which will reduce the prices of goods and provide relief to consumers.
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