The Indian government is looking at a GST overhaul, aiming to simplify the tax structure by Diwali. While the GoM has backed the plan, states are worried
about losing revenue. Find out what this means for you.
GST Overhaul Support
The GoM has given the green light to the Centre's GST rate rationalisation proposal. The plan involves removing 12% and 28% slabs, with most goods shifting to 18%. This change, aimed at benefiting the common man, will be decided in the GST Council.
Revenue Loss Concerns
States are worried about the potential revenue impact. They're pushing for mechanisms to compensate for any losses. Revenue shortfall is estimated around Rs 6,000-10,000 crore annually. This could impact the government's ability to fund public welfare programs.
Tax Rate Details
The proposed changes include a special 40% rate for 'sin' and luxury goods. Some states suggest amending GST laws for additional levies beyond 40%. Currently, some items have GST rates of 60-70%. Discussions also include how to handle the revenue loss.
The Common Person
A key discussion point is ensuring the benefits of the GST rate cuts reach the common man. Ministers from various states are in favor of the 'pro-people' approach. The government aims to provide relief to the common man, small entrepreneurs, and MSMEs with reduced tax burdens.
Next Steps
The GST Council will now discuss the proposal. States will present their observations on the potential revenue loss, and the final decision will be made based on these discussions. The proposed changes aim to make GST more user-friendly.
