The repair of commodity and services tax may reduce prices on dairy, bottled foods, small cars and consumer panels

The center is preparing to launch a large renewal system for the GST and Services Tax System (GST), where the new structure is likely to be detected in about September or October during the 56th commodity and services tax council.

Under the proposal draft, the basic elements such as ghee, butter, bottled foods, fruit juices and bottled coconut water, which are subject to tax at 12 percent, may turn into a 5 percent commodity and services tax plate. It is also possible that shoes and clothes less than $ 1,000 will move to an average of 5 percent.

The installation committee drafted the structure of the good -price commodity and services tax, to be offered to GOM to rationalize prices. The plan aims to replace the current Slab system with the initial rates, 5 percent and 12 percent, eliminating the current panels by 18 percent and 28 percent.

It is also suggested to dispose of compensation, which currently apply to many goods, to gradually get rid of them and replace them with a flat rate of 40 percent, is imposed on a narrow menu consisting of five to seven sin commodities, including tobacco and Masala.

According to the sources, approximately 99 percent of taxable commodities will turn 12 percent into a 5 percent panel, while about 90 percent of elements in the 28 percent category can move to 18 percent.

“The common use and the elements of daily use in the commodity and services tax rate will be 5 percent,” a source said.

The tax reduction of small cars and two wheels is also considered less than 250 cc, which reduces the tax and services tax from 28 percent to 18 percent, which may stimulate the revival of demand in these sectors. Similar discounts for other goods with other taxes such as air conditioners, 32 -inch TVs, and dishwashers. The cement industry can also benefit from a rate of 28 to 18 percent, providing potential relief for manufacturing and real estate sectors.

Officials have acknowledged that the proposed changes estimated by some analysts indicate that the loss of revenue ranges from 0.2 to 0.4 percent of GDP on an annual basis, which will be compensated by a boost in family consumption. Expecting that low prices will stimulate demand, which ultimately supports wider economic growth.

The proposals, formulated by the commodity and services tax installation committee, will be reviewed by GOM, led by Deputy Prime Minister at the Bihar of Samarat Ch Xodry, on August 20 and 21. Upon the consensus of seven members, recommendations will be made to the GST Council for the final consideration in mid -September.