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2-Day GST Council Meet Aims To Cut Compliance Burdens, Benefit Small Businesse
2-Day GST Council Meet Aims To Cut Compliance Burdens, Benefit Small Businesses
The Council will discuss two tax rates of 5 and 18 per cent by moving products from the current 12 and 28 per cent slab to lower rates.
New Delhi: Aiming to herald one of the biggest reforms in the country, the 56th GST Council meeting is all set to discuss the two-slab tax structure proposed by the Centre's to reduce GST rates on over 150 items as part of a comprehensive rate revision.
The two-day meeting, starting Wednesday, is chaired by Finance Minister Nirmala Sitharaman and ministers from all states. According to FM Sitharaman, the next generation GST reforms will create an open and transparent economy, reduce compliance burdens, and benefit small businesses.
The Council will discuss two tax rates of 5 and 18 per cent by moving products from the current 12 and 28 per cent slab to lower rates.
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(Also Read: 45% Of Indian Midle-Class Salaries Gone In EMI)
A special 40 per cent rate has been proposed to be levied on select few items.
The proposals to move various items from the 12 per cent and 18 per cent GST slabs to the 5 per cent slab or even to the nil GST category aim to reduce the tax burden for households and boost spending.
A significant part of the plan includes expanding the nil GST category by including commonly consumed food items like loose paneer, khakhra, pizza bread, chapati, and roti, which currently face GST rates of 5 per cent to 18 per cent, according to multiple reports.
(Also Read: A Few Allowance May Be Abolished In 8th Pay Comission-- Here's Why)
Ready-to-eat foods such as paratha and parotta, currently taxed at 18 per cent, are also considered for GST exemption. Items including butter, condensed milk, jams, nuts, namkeens, mushrooms, and dates may see a reduction in the tax rate from 12 per cent to 5 per cent.
The Centre has proposed reducing the GST on various confectionery, popular packaged snacks, breakfast items and dessert items from 18 per cent to 5 per cent. The items reportedly include cocoa chocolates, pastries, ice cream, and breakfast cereals such as cereal flakes, primarily used by urban consumers and younger demographics.
It is also expected to lower the tax on entry-level passenger vehicles and two-wheelers to 18 per cent, making them more affordable ahead of Diwali. Currently, all passenger vehicles based on combustion engines are subject to a GST of 28 per cent plus a compensation cess of 1 per cent to 22 per cent based on engine capacity, length, and body type.
The education sector is also set to benefit as items like maps, globes, pencil sharpeners, exercise books, graph books, and lab notebooks are proposed to have their GST reduced from 12 per cent to zero. This may offer significant cost savings for students and parents, particularly before the new academic year.
Rate cuts will be presented to the GST Council, comprising Central and State representatives. The revised GST structure may be implemented by September 22 after approval.
Source: ZeeNews
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