GST Shake Up: Center Plans 2 GST Slabs – 5 % and 18 %, 40 % Special price for 7 goods

The Commodity and Services Tax Council is likely to meet in September or October to discuss the next generation of reforms in indirect tax tax, which includes the center’s proposal to rationalize prices and has two main a two main and 18 % with a rate of 40 % on sin commodities such as tobacco and Masala.

The center for the GST reform, which has completed eight years, includes correction of the tax structure, including addressing upside down fees, solving classification issues, as well as repairs to ensure faster registration for companies within three days in 95 % of cases, and faster recovery.
If it is approved by the Commodity and Services Tax Council, the renewed tax system may be issued into force from the first part of the third quarter of the fiscal year.

Point proposals

The center sent its proposal regarding the average bilateral structure to the group of ministers under the commodity and services tax council to rationalize prices. The plan is to obtain two major GST rates by 5 % and 12 % while getting rid of 18 % and 28 %. Cess Cess is also scheduled, and it will be replaced by 40 %, which will be imposed on a reduced number of elements with a total of five to seven sin commodities, including tobacco and Masala.

According to the source, 99 % of the goods that are currently imposed by 12 % will be transferred to a 5 % tax plate, while approximately 90 % of the elements currently in the slab will be transferred by 28 % to the slab by 18 %. Although the sources did not reveal the changes that the element had told, they have made clear that the ambitious goods for use by the middle class, as well as white commodities such as TV and refrigerators, suggest that taxes are imposed at 18 % of the current 28 % tax. They said: “The common use and the elements of daily use in the commodity and services tax rate will be 5 %.”

Current exemptions and NIL rates of goods and services will continue on the specific elements, as well as marginal rates on the specific elements such as alloys and jewelry, and the intensive export and employment sectors.

The sources pointed out that from now, 67 % of the total revenue of the tax slab comes 18 %, while 5 % of revenues come from a rate of 12 % and 7 % of revenues come from the 5 % slab.

It is also expected that the commodity tax rates and services will decrease on common use and basic elements to consumption and revenue, and help increase GDP growth, although there may be some short -term impact on tax groups.

Increased consumption and economy

In his speech on Independence Day, Prime Minister Narendra Modi announced the introduction of GST reforms from the next generation by this Diwali, which aims to reduce taxes on daily use materials. The center is expected to discuss proposals with countries in the coming weeks to try to build a consensus on these.

“The idea is to move away from the inherited and legacy logic of GST to a new system of goods tax and friendly services for the average man who suffers from low tax rates and gives a boost to the economy and stimulating sectors such as agriculture, textiles, renewed and corrected.

Legislative amendments to the commodity and services tax law are not required to implement these proposals, and this means that if they are approved by the commodity and services tax council, they can be implemented through notifications.

The sources said that due to the comprehensive nature of the proposals, multiple meetings can also be summoned to the Commodity and Services Tax Council to discuss and agree to them in the coming months.

Recovered amounts and registrations faster, pre -domesticated tax declarations

Regardless of tax changes, the center also suggested structural reforms in the tax and services tax, including correcting the inverted fees that will help sectors such as textiles and fertilizers. The government also suggested simplifying price rates by placing similar goods in the same tax board to get rid of classification and litigation disputes on elements such as Namkens and Savouries.

Meanwhile, to enhance stability and the ability to predict the indirect tax framework, recommended technology -based recordings and faster recovery with the automated amounts of exporters and those that have inverted fees structures. He has also suggested carrying out revenues full of presets by reducing the invoice mismatch and reducing the burden of compliance.