The Centre is considering a significant overhaul of the Goods and Services Tax (GST) structure, proposing a simplified regime with just two main tax slabs of 5% and 18%, along with a special 40% rate for luxury and sin goods, PTI reported citing sources. As part of the rejig, about 99% of items currently taxed at 12% are likely to be moved to the 5% bracket, the sources told PTI. Similarly, around 90% of taxable goods in the existing 28% slab are expected to shift to the proposed 18% category.Common man items, daily-use products are likely to be taxed at 5% as part of the upgraded GST regime.The special 40% rate would be levied only on seven items, including tobacco, although the total incidence of tax on tobacco would remain at the current 88%, sources added.Also Read: India to simplify GST- Finance Ministry proposes two-slab system with special rates only for select items Under the present GST structure, which came into effect on July 1, 2017, the 18% slab accounts for the largest share, 65%, of total collections. The top 28% tax bracket contributes 11% of GST revenue, the 12% slab about 5%, and the lowest 5% rate on essential items around 7%. High labour-intensive and export-oriented sectors such as diamonds and precious stones would continue to be taxed at existing rates, the sources told PTI.Further, the government expects GST revamp will provide a big boost to consumption, which will offset revenue loss due to rate rationalisation.Earlier today Prime Minister Narendra Modi had announced that the next generation reforms in GST will be unveiled by Diwali, which will provide 'substantial' tax relief to common man and benefit small and medium enterprises.PM Modi, addressing the nation on 79th Independence Day, said the time has come to undertake reforms in GST as the indirect tax regime has completed 8 years.
- News Source Indiatimes (Click to view full news): CLICK HERE
0 Comments:
Leave a Reply