नवीनतम
GST reforms: GoM supports two-slab structure
NEW DELHI [Maha Media]: The long-awaited revamp of Goods and Services Tax (GST) has moved a step closer with the Group of Ministers (GoM) on GST rate rationalisation agreeing to cut down the number of slabs.
In a key meeting held on Thursday, the panel of state ministers accepted the Centre’s plan to reduce the four-rate system to two main slabs of 5% and 18%.
The move marks the beginning of what is being called GST 2.0, aimed at making the tax system simpler, easier to follow, and less of a burden on households and businesses.
At present, GST is charged at four different rates: 5%, 12%, 18%, and 28%. Under the new structure, the 12% and 28% slabs will be scrapped. Goods and services will now mostly fall under 5% or 18%.
A higher 40% levy will continue on a limited list of “sin goods” such as tobacco and certain luxury items. The panel also recommended that luxury cars be brought under the 40% tax bracket.
According to the plan, 99% of items that were earlier taxed at 12% will now move to the lower 5% slab. Similarly, nearly 90% of items under the 28% slab will shift down to 18%.
