GST Rate Cut Expected Around Diwali
Along with other changes to India’s indirect tax system that are anticipated to boost economic growth, the Central government has proposed eliminating the 12% and 28% slabs as part of a significant overhaul of the multitiered goods and services tax (GST) structure.
However, a central government official stated on Friday that the GST reorganization may short-term result in less money going to the exchequer.
The proposal calls for moving the majority of goods and services that currently have tax rates of 12% and 28% to the 5% and 18% slabs, respectively. According to the official, a few things that are currently in the highest 28% bracket will be moved to a new 40% slab that will only include a small number of “sin commodities,” such tobacco products.
There are a lot of rumors about which products will be less expensive this holiday season after Prime Minister Narendra Modi promised the general public during his Diwali dhamaka that his government would lower the Goods and Services Taxes (GST) on a variety of goods and services in the nation. Well! Let’s go over each item on the list individually.
The cost of goods that the average person uses on a daily basis may go down. Pencils, sharpeners, notebooks, namkeens, bhujia, combination, shoes costing up to ₹1,000, bicycles, etc. are currently subject to 12% GST. However, according to news agency PTI, the Finance Ministry has suggested that the Group of Ministers of the GST Council lower the GST rates on these commodities from 12% to 5%. Such commodities would become less than 7% more affordable as a result.
The administration is also proposing to eliminate the 28% GST slab in addition to the 12% regime, the news agency has also learned from government sources. As a result, the lower 18% slab would receive 90% of the goods and services from the 28% slab. Therefore, it is anticipated that these things will become less expensive after the rejig.
As a result, things like air conditioners, dishwashers, televisions and computer monitors larger than 32 inches, tires, and motorcycles up to 350 cc may become more affordable.
However, high-ranking government sources have also told PTI that the remaining 10% of the 20% slab’s items might be moved to a new 40% slab, which would primarily consist of inferior commodities like luxury and sin.
As a result, goods like tobacco might become even more expensive because the government might impose 40% GST on them instead of the existing 28%.
