Big change in GST: Council proposes 5% and 18% tax, know what will become cheaper
The central government has proposed a major change in the GST system. In the new structure, tax on items of common use will be reduced to 5%, while luxury and harmful goods will be taxed at 40%. The government believes that these changes will increase consumption and compensate for the loss of revenue.
99% of the items currently falling in the 12% GST slab will be brought under the 5% category. Items of everyday use, such as common household items, cheap clothes and items of common need will be included in it. The government says that this will provide relief to the common people.
What changes have been made?
- 40% tax on expensive and luxury goods
- 40% GST will be levied on luxury items and harmful goods like tobacco products.
- The total tax burden on tobacco will remain at the current 88% level.
- Expensive cars, branded liquor and other luxury products will be included in this category.
Petroleum products still out of GST
28% GST slab cut and petrol-diesel out. About 90% of the goods falling in the 28% GST slab will be brought into the 18% category. These changes are expected to increase consumption, which will compensate for the revenue loss due to the reduction in tax rates. Petroleum products will still remain outside the scope of GST.
