Goods and services tax (GST) News: Describing the proposed reforms in GST tax as ‘the next generation GST’, senior government officials said on Saturday that the 2 -slab tax system will gradually open the way for single sales/service tax rate. He hoped that there could be a single tax slab by 2047. He said that the proposed new GST system, in which only 5 percent and 2 slabs of 18 percent have been determined by reducing tax rates, will promote the economy and also help reduce the dangers of fees. The officials said this on the condition of anonymity.
If the two -slab system proposed by the GST Council is approved, then it will replace the existing four slabs of the Goods and Services Tax (GST) system. With this, the slabs of 12 percent and 28 percent will end. Describing it as a GST of the next generation, a government official said, this is a revolutionary reform. In the category of economic reforms seen in India, it tops.
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The officials said this on the condition of anonymity. He said that the new system will mean that almost all the general use items will fall into the lower tax category, which will reduce prices and promote consumption. The official said, the less tax means that more money will come in the pockets of the people. This will reveal that consumption will increase.
The officials explained the argument behind this exercise that the proposal to impose five percent and 18 percent GST on normal items and 40 percent on items considered by the government is a big and thoughtful step.
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The changes made after about six months of continuous meetings and consultation have been prepared in such a way that there is no need to change the tax rates and the money of tax cuts (input tax credit) is not stuck anywhere. Officials said that as soon as the proposal of the Center will be approved by the Group of Ministers (GOM) and the GST Council, repeated ups and downs in tax rates will end and the system will be stabilized.
“We have suggested the next generation GST GST keeping in mind the middle class, poor, farmers and micro, small and medium enterprises (MSMEs),” the official said. It has also been ensured that taxes are less on everyday things.
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The official said, when this system is fully implemented and India becomes a developed country, then we can consider implementing the same rate of GST. The same rate of system is fine for developed countries, as there is almost the same income and spending ability. The official said, the final goal is to bring the same tax slab system, but at the moment there is no right time for this.
The official said that every rules and regulations are being followed in this entire process of change. The central government is playing the role of leadership, but is doing the balance of ministers with a group of ministers (GOMs), following the constitutional responsibility.
The official said, “We have seen every item closely and have also considered three to four times in many cases.” Whether it is pesticides for farmers, raw material for students or raw materials for MSMEs is discussed in detail and is placed in the category of essential or normal items.
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The revised system of GST is estimated to be implemented by Diwali. The central government has sent its proposal to the group of finance ministers of the states constituted to rationalize GST rates. The current tax rates of 12 and 28 percent have been removed.
In the revised GST system, it has been proposed to keep a special rate of 40 percent for luxury and harmful items besides two tax slabs. Now a group of ministers will discuss this proposal and based on it will put their recommendation before the GST Council. The GST Council meeting is expected to be held next month.
At present, zero percent GST is imposed on essential food items while five percent on daily use items, 12 percent on standard goods, 18 percent on electronics products and services and 28 percent GST on luxury and harmful goods. Sources said that this year only five percent and 18 percent have been proposed in this revised format ready to replace the current indirect tax system till Diwali.
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Prime Minister Narendra Modi announced a significant reduction in GST rates till Diwali during his address on 79th Independence Day, saying that it will provide relief to common people and small and medium industries. A source hoped to implement its implementation in the beginning of the third quarter, saying that the change in tax rates will make a difference in revenue but it will be compensated in the next few months. (Language)
Edited by: Chetan Gour
