Centre Proposes GST Revamp: Common-Use Items to Get Tax Relief

Swift Summary

• Proposed GST Reforms: The Center has proposed reducing the number of GST tax slabs, retaining the 5% and 18% rates, introducing a concessional rate below 1%, and a “sin rate” of 40% for five to seven items (e.g., tobacco).
• Changes in Tax Slabs: Existing 12% and 28% tax brackets will be removed. Most items in the current 12% slab will move to the lower, 5%, while those in the upper, 28%, will mostly shift to an intermediate rate of 18%. No cess would apply above these revised rates.
• Fiscal Context: though reforms may initially reduce revenue intake slightly, officials project gains from increased consumption and reduced evasion over time. Data shows that approximately two-thirds of current GST revenue comes from items taxed at an existing rate of 18%.
• white Goods & aspirational Items: Taxes on air conditioners (from current high levels at around 28%) and other white goods could potentially see reductions-daily-use essential products like toothpaste or soap could also become cheaper.
• ease-of-Living measures:

– streamlined processes for GST registration with faster digital operations
& automation-driven refunds.. Automated mismatch alarm CX:[solcery