On Wednesday, the Goods and Services Tax (GST) Council made a historic announcement: everyone agreed on all the plans to change India’s indirect tax system. The most important change is that the number of GST tax brackets will go down from four to two.
This is a big step toward making the country’s tax system easier to understand. Since the GST was first introduced, a unified system has been a long-term goal. We don’t know yet what items and services will go into the two new slabs, but this agreement is a big step forward.
The decision comes just a day after Karnataka, Punjab, and West Bengal, among other states, said they were worried about losing money because of the proposed tax cuts. But the agreement reached on Wednesday shows that a solution was found, perhaps involving new ways to secure state funds.
The ultimate agreement on this tax revamp marks the start of a new era of GST reform, which will make it easier to follow the rules and increase economic activity.