India to simplify GST: Finance Ministry proposes two-slab system with special rates only for select items
GST Likely To Move To 2-Slab Structure, Lower Tax Rates: Prime Minister Narendra Modi addressed the nation from the ramparts of the Red Fort for the 12th time. During the Independence Day speech, PM Modi also made several announcements. During his address, PM Modi said that the countrymen will get a double gift this Diwali.
Prime Minister Narendra Modi said that we are going to bring a big reform in GST on Diwali. He said that after its introduction, the tax on everyday items will be reduced. It is believed that this will provide a lot of relief to the common people.
The Finance Ministry sent the proposal to the GST Council
Amidst the announcement of PM Modi, the Finance Minister has presented a proposal to the GST Council, in which structural reform, reduction in tax rates, and making GST simpler have been discussed.
In his address to the country from the ramparts of the Red Fort, PM Modi termed GST as a major reform. According to the Prime Minister, India’s economy has a new look since the implementation of GST in the year 2017. Meanwhile, PM Modi has mentioned the Next Generation GST, for which a proposal has been sent. Let us tell you what is going to change with this?
Changes as structural reforms
The central government is considering eliminating the difference between input and output tax rates. This will help in reducing the tax credit. Along with this, it will also help in promoting domestic manufacturing. The new change also aims to streamline issues related to classification. So that the current disputes and rules-related problems can be reduced.
Now there will be only two slabs
According to reports, only 2 slabs have been proposed under the new GST reform. Currently, there are slabs of 0 percent, 5 percent, 12 percent, 18 percent, and 28 percent. It has been considered to reduce it to only 2 slabs of standard and qualification. However, special rates will apply to some items only. The new proposal also includes tax cuts on essential and ambitious items. So that consumption can increase. After this reform, due to tax reduction, many everyday items will become cheaper. Due to this, common people are likely to get a lot of relief.
Small businesses hope to benefit
Along with this, it is being said that GST reform is an attempt to make small businesses and digital easier. It emphasizes creating seamless technology, quick refund of already filed GST returns, to reduce errors and human intervention. It is worth noting that the Finance Ministry said that the Center is committed to working closely with the states.
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