GST Reform
It has been eight years since GST came into force, but there is still confusion about tax complications and slabs. On August 15, Prime Minister Narendra Modi announced a cut in GST in his speech from the Red Fort. The government wants to reduce the existing four tax slabs – 5%, 12%, 18% and 28% to only two slabs, including 5% and 18% tax rates. With this change, common people will get essential things cheaper and the tax system will be easier for businessmen. Tax complexities will also be reduced, which will increase the facility in business.
Keeping this in mind, the GST Council is holding a big meeting on 3-4 September. This time, especially on eating and drinking items, there will be a discussion on the tax to 5% of the tax. If this decision is made, then the confusion of tax will end and the common man will get direct benefit.
Similar tax on essential things
Foods and clothes are our everyday essential items. Right now different tax slabs are applicable on them, which causes problems to both shopkeepers and customers. According to a report by The Economic Times, now the GST Council is considering bringing them to 5% tax. This will give the consumer cheaper and the tax system will also be easier for the businessmen.
Now cement will be taxed at 18%
Another big change can be made about tax on cement. Currently, 28% tax is levied on cement, which is considered very much because cement is the most important thing for houses, roads and other construction works. The council is bringing a proposal to reduce it to 18%. This will reduce the prices of construction material, and will affect the pockets of people building or repairing houses. However, the government wants this tax deduction to reach the consumers directly, not only the manufacturers’ profits.
Taxes will also be reduced on salons, beauty parlors and insurance
Along with food and construction goods, there are preparations to reduce tax on some services. For example, there is talk of decreasing 18% tax on mid-to-end and beauty parlor to 5%. With this, these services will become cheaper for the common people and people will be able to use more. Similarly, there are plans to abolish GST on personal life insurance and health insurance. Its aim is to take more and more insurance and increase their economic security.
Plan to simplify tax slab
Currently there are 4 tax slabs under GST, which often produce confusion. Council is considering bringing it into only 2 slabs 5%, 18%. 5% Slab will have most everyday goods and services, a little expensive items and services in 18%, along with the central government has planned to install 40% GST on extremely luxury items and sin goods (such as alcohol, cigarette, luxury cars etc.). Although some states have asked to increase the limit of 40%, but the government has rejected it at the moment so that the tax system is easy and easy to understand.
Common man is going to get big relief
According to the report, the government is preparing to implement the new GST slab from 22 September. This date also matches the festivals of Navratri (22 September to 2 October), which is expected to get special benefits to customers during festive purchases. After passing this proposal, there will be a big difference on the daily needs of the common man. Eating and drinking items, clothes, household items and essential services like salons will now become cheap. Also, due to the end of tax on health and life insurance, people will prefer to take insurance more, which will also improve their economic security.