New Delhi: Historic reform in GST, now only two tax slabs – 5% and 18%

New Delhi: Historic reform in GST, now only two tax slabs – 5% and 18%

In a crucial two-day meeting of the GST Council chaired by Finance Minister Nirmala Sitharaman, a major decision has been taken. The existing four GST tax slabs have been reduced to just two – 5% and 18%. This new tax structure will be implemented across the country from September 22. The move is being seen as a significant step towards simplifying the tax system, making it transparent, and serving the interests of the common people.

It was also decided that GST rates on over 175 items will be reduced, making essential daily-use products cheaper. However, a proposal has been made to levy 40% tax on cigarettes, alcohol, and other ‘sin goods’.

All state finance ministers have agreed to the decision, though some states have demanded compensation for potential revenue losses. The new system is expected to boost consumption in both rural and urban economies and accelerate the country’s economic growth.

This is being seen as another strong step towards fulfilling Prime Minister Narendra Modi’s promise from the Red Fort, bringing the tax system closer to the vision of “One Nation, One Tax”. Consumers will benefit from lower taxes and cheaper goods, while businesses will enjoy a simpler and clearer process.

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