Government can make changes in GST
There is going to be a big change in the country’s tax system. It is reported that the government is preparing to abolish 12% slab in GST (Goods and Service Tax). The Prime Minister’s Office (PMO) has given the green signal to this major change. According to a news by Economics Times, this will be the first such big step after eight years after the implementation of GST. In the next meeting of GST Council, a final decision can be taken on this. This meeting can be held in August after the monsoon session of Parliament. Come, let us tell you what will happen with this change and how it will affect you.
What is the plan to change GST?
According to the Economics Times report, the next meeting of the GST Council will propose to remove 12% tax slab. At present, there are five main slabs in GST- 0%, 5%, 12%, 18%and 28%. Apart from this, there are two special slabs of 0.25% and 3% for bullion like gold and silver. It is proposed that 12% slab should be eliminated and the items involved in it should be shifted to 5% or 18% slabs. This is an attempt to make the tax system easier.
The Finance Ministry has started negotiations with states to implement this change. The aim of the ministry is to persuade all the states for this improvement. The GST Council takes decisions related to indirect tax (indirect tax), and this proposal will be discussed in its next meeting.
Why is this change important?
Experts say that the purpose of this change is to reduce tax slab and make GST processes easier. This will provide relief to traders and things can be cheaper for customers as well. Currently, 5% slab consists of 21% items, 12% of the slab 19% goods and 18% slab. The highest 28% slab has only 3% goods. Due to the end of 12% slab, most of the goods will either go to 5% or in 18%, which will make the tax structure more clean.
For some time, the industry has been demanding a change in GST. Traders say that existing slabs and procedures are complex, causing them problems. Many MPs have also raised the problems related to GST in Parliament and have told the need to solve them.
The economy will get boost
The big officials of the government believe that by simplifying GST, the economy will get a new speed. An official said, “The tax structure is now stable and the economy is in a strong position. This is the right time to change.” The government is working on the Free Trade Agreement with many countries. In such a situation, it is an attempt to provide full benefit to local industries by easing GST.
It is worth noting that after the implementation of GST, compensation cess was levied with 28% tax on certain things, such as cigarettes and trains, to compensate the states. This system was till June 2022, but was later extended to March 2026. This was done so that the interest and principal of the loan of 2.69 lakh crore taken by the states during Kovid could be paid. The GST Council has formed a separate ministerial group, which will decide how the money left in the cess fund will be used.
When will the new rates be applicable?
If the GST Council approves this proposal, then the new rates may be implemented soon. However, the consent of all states is necessary for this. The Finance Ministry is working fast in this direction. Also, there is a preparation to change the income tax law, whose bill can be introduced in the monsoon session.