Currently, GST is used in four boards – 5%, 12%, 18%and 28%. In addition, it is selected for luxury objects and so -called sine goods such as tobacco and caffeine drinks. The plan approved on Thursday assumes that it will cancel 12% and 18% of the board. This will include the transfer of most items up to 12% to 5% and most products in 28% of the board, including some cars, to 18%.
Insulin, condensed milk, canned fish and vegetables, granite and marble, dishes and kitchen dishes and some pharmaceutical products are products that will range from 12% to 5%.
Sin goods and “super luxury vehicles” can be part of a new 40% board. The Top-End SUV could still benefit from lower tax burden, as the withdrawal will be applicable to 28% of the board. However, the discussion concerns a new obligation for goods such as tobacco, which are also expected to currently move from 28% of the PLUS board to the proposed 40% board without withdrawal, so that the tax occurrence remains the same after the tax.
The new system is a step towards a simpler regime in the Indian eight -year GST mode, originally designed as the only uniform tax across the country, but later turned into more rates and CESS on top of some products on the highest board, 28%.
The decision applauded the Confederation of Indian Industry (CII).
“This will certainly reduce the complexity of the classification and improve the ease of business. In addition, it would streamline the overall structure of GST rates and would help industry with all more competitive.
The state ministers informed the media after Thursday’s session and expressed the support of the new regime.
“A group of ministers discussed the proposal of a central government to reduce 12% and 28% of the boards (for the structure of two rates) and approved it. The recommendations will be listed before the GST Council,” said Samrat Chaudhary, representative of the main Minister Bihar, who is also a group’s convention.
The Minister of Finance of West Bengal Chandrima Bhattacharya said that the group approved the center proposals and that no one would be against the measures friendly to consumers. She said her state suggested that tobacco and preparations, which are currently attracting GST compensation except 28% of GST, should be selected by a new obligation to remain unchanged after the tax occurrence even after ending this year.
The Minister of Finance UTTAR Pradesh Suresh Kumar Khanna said that each member of the ministerial group welcomed the center proposals. In addition to the congressor, the panel has five members, including the Minister of Finance KERAL KN BALAGOPAL, Minister of Income Karnataka Krishna Byre Gowda and Rajasthan Minister of Health Gajendra Singh.
“The rationalization of the GST rate is in the interest of an ordinary person. It will give them relief,” Khanna said. If measures are taken for people, it will have some income impact, but due to the benefits for people, everyone has approved it, ”Khanna added.
“We do not have any problems with taking measures for people. However, the scope of income loss due to these measures has not been quantified in the proposals. We also have to think about how to replace the loss of income,” Bhattacharya said. The Minister said that if a group of ministers submit their report to the Council, a note will be included.
Experts stated that the decision is likely to increase demand and consumption.
“The Move to Cut GST SLOS FOUR TO JUST TWO IS A BIG STEP TOWARDS SIMPLIFICATION. FOR CONSUMERS, THIS Means That Maneryday Goods and Services That Were Earliers Taxed at 12% May Now Come Down to 5%, Directly Reducing. COULD SOON BE AVAILABLE AT 18%, WHICH Will Make Products Like Appliances, Electronics and Even Cars More Affordable, “Said Sandeep Sehgal, Partner-Tax at Akm Global, and Tax and Consultation Company.
For businesses means a simpler structure of less disputes and easier compliance, Sehgal said. “While cereals and super luxury cars fall below a higher 40% rate, removal of further resignation will still alleviate the overall load of luxury vehicles. Overall, this reform is expected to increase demand and increase sales in key sectors such as fast -moving consumer goods, consumer quantities and cars.
Minister Bhattacharya explained that GST compensation has selected for certain products in 28% of the album, will have to be terminated because it cannot be selected for the period. Therefore, to ensure that the tax occurrence of products such as tobacco that is on this board and also currently attract compensation CESS at different rates will remain unchanged after restructuring the tax rate, a new obligation must be introduced. This could be made by a change in the law of GST, explained Bhattacharya in response to a question.
Bhattacharya said that one must ensure that bonuses for health and life insurance are exempt from GST, the company hand over this advantage to the consumer. “It is necessary to ensure that insurance companies do not increase the premiums or do not behave in any way, which denies the advantage of tax relief for the final consumer. It is the duty of the central government,” the minister said. Bhattacharya is also a member of another ministerial group who adopted a central government’s proposal on Wednesday to save health and life insurance premiums from 18% of GST.
Another expert said that the government should also make the necessary changes to correct the problem of finished products attracting lower or no tax, while inputs have higher tax expenses. This anomaly, referred to as the reverse tax structure, affects the appeal of certain segments of the industry to potential investment and has been to solve the priority for politicians.
“The industry is looking forward to the comprehensive solution to the refund of the inversion of duties, and the Ministry of Finance identified this as a key structural problem,” said Mahesh Jaising, partner and leader, indirect tax, Deloitte India.
(Tagstotranslate) gst
