Significant tax reforms may be decided in the GST Council meeting scheduled for September. Preparations are underway to reduce the four tax slabs to two. This could result in everyday items like paneer, roti, medicines, and stationery becoming tax-free or falling under the 5% slab. Luxury and harmful goods will be taxed at 40%.
GST Council Meeting: An important GST Council meeting is scheduled to take place in New Delhi on September 3rd and 4th, where decisions on GST reforms will be made. According to media reports, there is a possibility that the current four tax slabs will be reduced to just two slabs (5% and 12%). Under this, everyday items such as paneer, pizza bread, roti, khakhra, medicines, and stationery may become tax-free or come under the 5% category. Meanwhile, luxury and harmful goods will be taxed up to 40%, while petroleum, gold, and diamonds will remain under the old tax structure as before.
GST Council Meeting to be held in September
The GST Council meeting will be held on September 3rd and 4th. During this time, the Finance Ministers of the Center and the states will discuss several important issues. According to media reports, a major decision on GST reforms could be taken in this meeting. There has been a long-standing demand to reduce the GST slabs, and now the Council is poised to take concrete steps on this matter.
Major Change in GST Slabs
Currently, four GST slabs are applicable in the country: 5%, 12%, 18%, and 28%. However, preparations are underway to reduce these to just two slabs. According to reports, only 5% and 12% slabs will remain. This will directly impact consumers' pockets as taxes on many items will decrease.
No Tax on Everyday Items
The biggest relief news is that some essential items may become completely tax-free, meaning no GST will be levied on them. It is being reported that consideration is being given to completely abolish tax on daily consumed food items like paneer, pizza bread, khakhra, chapati, and roti.
Relief on Stationery and Medicines Too
Not just food and beverages, but stationery items and many essential medical devices and medicines are also being prepared to be brought under the tax-free or 5% slab. This means that items like school notebooks and medicines for common illnesses could become cheaper than before.
12 Percent Tax Slab to be Abolished
According to reports, approximately 99% of products currently falling under the 12% tax slab could be moved to the 5% slab. This will significantly reduce the prices of these products.
Currently, many products fall under the 28% tax slab. However, after GST reforms, these will be reduced to the 18% slab. This could lead to a tax reduction of up to 10% on expensive products.
Higher Tax on Luxury and Harmful Goods
While taxes on common and essential goods will be reduced, tax rates on luxury and harmful goods may increase further. It is being reported that taxes of up to 40% may be imposed on these. This will include alcohol, cigarettes, and other harmful products.
No Change in Tax on Petroleum and Gold
Despite GST reforms, the tax structure on petroleum products and precious items like gold and diamonds will remain the same. There is currently no plan to make any changes in this regard.
Impact on Consumers
These reforms will provide significant relief to common people as everyday items will become cheaper. The abolition of tax, especially on food and medical items, could reduce families' monthly expenses. For businesses, the GST structure will also become simpler.
