GST Council in the middle of expanded tax cuts on a wide range of everyday use and aspiration goods from packaged foods to consumer electronics, simplification of multi -level structure and stimulation consumption. During the marathon meeting, which extended over 10 hours, the Federal authority for indirect taxes was carried out by the largest CEO of the Indian tax on goods and services (GST) and offered to encourage millions of consumers before the key festive season of the nation.
New rates take the effect of 22 September, cooling of a number of objects from toothpaste and shampoo to dishwashers, television ensembles and small and large cars. The main point of gluing, however, remains unresolved: several states that were not controlled by the party of Bharatiya Janata, marked the potential loss of income and sought to compensate, which is a requirement that is not yet dealing with the central government.
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Finance Minister Nirmala Sithaman said it is not only a rationalization of the tax rate, but also about reforms and improvement of easy business. “There will be only two records,” Sitharaman said.
Focus on an ordinary person
“The reforms were done with an ordinary person,” said the Minister at a late night’s press briefing, adding that any tax selected for items used by an ordinary person was strictly reviewed when completing the designs.
As part of the tax rate, GST for products such as hair oil, shampoo, toothpaste, dishes and kitchen dishes, descend from 12% or 18% to 5%. Similarly, products like Pwheer and all forms of Indian breads, whether Roti or Paratha, will fall from 5% to zero.
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The tax rate on products such as air conditioning, TVs, dishwashing machines, small cars and motorcycles up to 350 cm will drop from 28% to 18%. Biopesticides, natural menthol, crafts, marble, granite blocks and medium leather goods will drop from 12% to 5%.
GST on hotel rooms with daily tariff below £7,500 will be reduced from 12% to 5%. However, in addition to the economy class, the air transport service will move from 12% to 18% with the abolition of 12% of the album. The composite delivery service for survey at sea will also move from 12% to 18%.
The tax burden on top cars will also descend with the expiry of compensation. According to the decision of the Council, cars with engine capacity of more than 1200 ccm (1500 CMC in the case of cars driven by diesel) move from 28% to 40% without compensation. With the expiration of CESS, which ranges from 17% to 22% on these cars, these vehicles actually become cheaper, despite the transition to a higher GST. Small cars will also benefit from tax reduction because they will be from 28% to 18%.
Buses, three wheels and ambulances attract 18% instead of the current 28%. Sitharaman explained that the new 40% of the special rates will only apply to sin goods such as Mr. Masala and cigarettes, and super-luxury goods such as sports utility vehicles.
Insurance
All individual life insurance insurance and all health insurance policies, including family policies, will now be exempt from GST. They are currently attracting 18%, Sitharaman explained.
Sithaman said the discussion continued for a long time, but each member approved the proposals. “They understood the need for an hour,” Sitharaman said, thanking the council members.
Mr. Masala, Gutkha, cigarettes, chewing tobacco products, non -reducing tobacco and bids will continue at the current GST and compensation rates, if possible, until the interest for interest in the remuneration account.
Superstructure
All the proposed changes will come into force on 22 September, the first day of Navaratri, with the exception of the transition of tobacco and tobacco products into a new regime for which the chairman of the GST Council decides on the date.
According to the restructuring of the tax, GST will now be collected for the retail price by Mr. Masala, Gutka, Cigarettes and chewing tobacco instead of a transaction value.
This means the most ambitious GST reform, the only national tax that the Prime Minister Narendry Modi introduced in the first term of office and tried to unify the huge Indian market. Confession of consumption is a priority for modi, with several branches of export -oriented tariffs.
This step comes when the government is trying to face external pressures, including a new, repressive tariff regime from Trump’s US administration that threatens Indian exports. Recovery powered by consumption at home could help balance these heads.
Concern
However, states expressed concern about possible shortcomings of income, while the Minister of Finance Punjab Harpal Singh Cheema demanded an alternative mechanism of compensation for lost tax revenues. The Minister of the City Planning Himachal Pradesh Rajesh Dharmani noted the supposed cumulative loss of $ 11.1 billion income, and only half of this amount of higher taxes on “sin” and luxury goods is expected. While the center is good on the way to repay the previous loans to compensate GST for states before the plan, officials from both states said there was no consensus on new fees that would deal with future losses of income.
Finance Minister West Bengal Chandrima Bhattacharya said that while 40% of the GST was approved on the “sin” goods, no decisions were made on any other fees to replace compensation. Bhattacharya expecting an annual loss of income £47 700 Crore noted for its state that the estimated total loss of income of the central government was probably too low.
Minister of Finance Jharkhand Radha Krishna Kishhore screened the annual loss of these fears. £2,000 Crore for its state, especially from the automotive and cement sector, and urged the center to consider the economic impact on states after currently compensation.
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