New Delhi: An office letter from Friday said that the 56th Goods and Services Tax (GST) Council meeting will take place on September 3rd and 4th in New Delhi. This important conference comes at a time when the government is making a big push to change and streamline the system of indirect taxes. Prime Minister Narendra Modi first talked about this reform in his recent Independence Day speech.
The Group of Ministers (GoM) recently finished a two-day meeting where they provided suggestions for rate rationalization. The GST Council will now look at these suggestions. The Group of Ministers (GoM), led by Bihar Finance Minister Samrat Choudhary, has suggested that the GST structure be changed to two slabs, keeping only the 5% and 18% rates. This would get rid of the current 12% and 28% slabs.
“The GoM on rate rationalization has suggested a GST structure with two slabs.” Choudhary said on Thursday, “We will send our suggestions to the GST Council.”
Sources say that the GoM agreed to get rid of the 12% and 28% slabs in order to make GST easier and less of a hassle for businesses to follow. The idea also suggests that states should charge an extra 40% tax on some luxury and sinful goods to keep their revenue the same.
A high-ranking official who was part of the talks said that the goal is to make the GST system “simpler and more open” while also protecting the revenue of both the Centre and the states. Many people agree with the concept, but some states are worried about losing money and want a strong way to make up for it.
India’s current GST system has four levels, with rates of 5%, 12%, 18%, and 28%, with a special tax on luxury and sinful items. The proposed changes are part of a bigger proposal for a “next-generation GST” that aims to make the tax system easier to understand, cut down on categorization disputes, and make the tax system work better overall.
The government is said to be committed to this big policy adjustment by the approaching Diwali holiday season.