Under the proposal to improve GST, if the government applies only 2 tax slabs (such as 8% and 15%), as suggested in reports, many daily use items and festive season purchasing items may be cheaper than Diwali. Many other items including ghee, medicine, AC-TV, car-bike can be cheap. Currently, GST has four main slabs – 5%, 12%, 18%and 28%, and making the tax structure easier can provide direct relief to customers by just two slab. According to an estimate, all kinds of things can be cheaper.
What things can be cheaper in Diwali?
If the government implements two new GST slabs, then furniture, LED lights and decorative lights, shelves and home decor items, electronic home appliances like TVs, mixers, fans etc. will become cheap. Apart from this, shampoo, soap, cream, toothpaste, perfume, deodorant, (which are currently in 18% or 28% tax) can also be cheap. Chocolate, sweets, processed foods, salty, bakery items and ready-to-eat products can also be cheap in food items.
Clothes and footwear and fashion accessories
GST slab is reduced due to branded clothes, shoes above ₹ 1,000, fashion accessories, toys and children related things, children’s toys and school stationery like bags and water bottles, headphones, smartwatch, mid-range mobile phones are also expected to decrease.
After all, why will these things be cheap?
Let me tell you, the goods which are currently under 18% or 28% GST slab, if they are added to 15% tax slab, their price will be reduced. The completion of the tax structure will reduce the complex cost, which can reduce prices. Obviously, this will increase consumption, which will promote festive demand in the market.
Additional consumption of ₹ 1.98 lakh crore will be encouraged
Under the GST reform proposed by the central government, there will now be only two tax slabs- 5% and 18%, which is likely to provide relief to consumers. Although this is estimated by the government to a revenue deficit of ₹ 85,000 crore per year, it can encourage additional consumption of ₹ 1.98 lakh crore. This information is given in the latest report of SBI Research on Tuesday.
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