To simplify the tax system in the country, the government is preparing to implement a new GST tax slab (GST rate overhaul) from September 22. This date coincides with Navratri (September 22 to October 2), which is expected to provide relief to customers in festive shopping.
The new slab may reduce taxes on essential commodities, which will benefit the general public. Experts believe that this will boost the economy and also benefit small businesses. The government may make an official announcement on this soon.
What is going to change?
Currently, there are four slabs in GST – 5%, 12%, 18% and 28%. Under the new proposal, it will be reduced to two slabs (two-slab GST structure) 5% and 18%. Merit goods i.e. essential goods will come in the 5% slab.
The 18% slab will contain standard goods and services. Apart from this, ultra-luxury cars and sin goods will attract a special tax of up to 40%.
When will the decision be taken?
The GST Council meeting is scheduled to be held in Delhi on 3-4 September, in which the finance ministers of the Centre and all the states of the country will participate. The final discussion on the new rates will take place in this meeting. Notifications will be issued 5-7 days after the decision and can be implemented by 22 September.
What is the purpose?
The government says that this reform will simplify the tax structure (GST Reforms). It will provide relief to the middle class and MSMEs and will help in increasing demand during festivals.
Prime Minister Narendra Modi on August 15 called it “GST 2.0 Next Generation Tax Reform”. He claimed that it would benefit farmers, middle class and small businessmen.
What is your benefit?
If the new structure is implemented, taxes on everyday items and essential services may decrease. At the same time, non-essential and luxury items may become expensive. When GST 2.0 is implemented from September 22, both the market and the common consumer will be affected.
There may be some relief on electronics, clothes and everyday items during the festivals, but the prices of luxury items will increase further.
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