79th Independence Day: GST reform… Tax cuts, 2-slab system and more
79th Independence Day: The central government wants to eliminate the difference between input and output tax rates, so that tax credit can be reduced. Also wants to remove some slabs. Apart from this, the Finance Ministry has submitted a proposal to the GST Council to speed up the refund process on GST returns.
On the79th Independence Day, The PM Narendra Modi made a big announcement regarding GST. He said that on Diwali we are bringing a big reform in GST, which will reduce taxes. Amidst this announcement of PM, the Finance Ministry has presented a proposal to the GST Council, which includes structural reform, reducing tax rates and making GST easier.
PM big announcement on GST
On the occasion of 79th Independence Day, Modi described GST as a major reform, which has given a new shape to India's economy since its launch in 2017. The proposal presented regarding Next Generation GST is being reviewed by a Group of Ministers (GoM) and it is targeted to be launched in the current financial year, by the time of Diwali. Let us know what will change under this.
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Structural reform
The central government wants to eliminate the difference between input and output tax rates, so that tax credit can be reduced and domestic manufacturing can be promoted. There is also a plan to streamline classification related issues so that the current disputes and rules related problems can be reduced. The aim is also to make the rates stable and policy oriented in the long term.
Only two slabs
Under the new GST reform, there is a proposal to keep only 2 slabs. Currently, there are 0%, 5%, 12%, 18% and 28% slabs, which will be reduced to only 2 slabs of 'standard and eligibility'. Special rates will be applicable only on selected items. The proposal also includes reduction in tax on essential and ambitious items so that consumption increases by 8%. Due to reduction in tax, many items will be available at cheaper rates, which will benefit a wide number of people from middle class, students and farmers.
Benefit to small businesses
The third change is about making small businesses and digital easier. This includes creating a seamless technology, issuing quick refunds on pre-filled GST returns to reduce errors and human intervention, etc.
Summary
The Finance Ministry said that the Center is committed to working in coordination with the states. The GST Council will discuss the recommendations of the Group of Ministers in its next session, with an emphasis on speedy implementation.
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