Union finance minister Nirmala Sitharaman said at a key meeting on Wednesday on the Goods and Services Tax (GST) that a rejig in the rates — reducing it mostly to two slabs of 5% and 18% — will provide relief to the common man, particularly to farmers, the middle class and small enterprises.
“The next-generation GST stands on three pillars: structural reforms, rate rationalisation, and ease of living,” she said at a Group of Ministers (GoM) meeting with states in Delhi, PTI reported.
Prime Minister Narendra Modi announced the GST rejig plans during his Independence Day speech last week.
On Wednesday, Sitharaman showed to the state GoMs her government’s plans as these groups hold meetings over two days. The meetings are focused on rationalising the rates; the tax on insurance; and compensation cess.
What are plans on new GST rates?
Besides the 5% and 18% slabs, there will be another slab, as high as 40%, but only on 5-7 luxury items, reports have said.
At present the slabs are 5, 12, 18 and 28%. The lowest slab is for good considered essential but taxable; luxury goods are in the highest slab of 28%, with a cess on top.
In her 20-minute address to the state GoMs, the finance minister explained the necessity for GST reforms to the states, the source added.
“The Central Government remains committed to building a broad-based consensus with the States in the coming weeks to implement the next generation of GST reforms in the spirit of cooperative federalism,” the finance ministry said in a post on X.
The proposals, after approval by the GoMs, will go to the GST Council that has ministers from Centre and all states, next month.
PM Modi has promised the new rate rollout by Diwali, which is in October.
Source: Hindustan Times
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