GST Council okays 2-tier tax structure
GST Cuts on ACs, TVs, Fridges & Washing Machines – Big Savings for Buyers
- New system to be implemented from September 22
- GST on footwear, apparels priced up to `2,500 cut to 5 pc
- Opposition-ruled states seek revenue protection
New Delhi: The GST Council on Wednesday approved a dual tax rate structure of 5% and 18%, removing the 12 per cent and 28 per cent slabs, according to highly placed sources.
The two-day meeting of the apex tax body began on Wednesday and will conclude on Thursday. It is being chaired by Union Finance Minister Nirmala Sitharaman. According to reports, the Goods and Services Tax (GST) Council has also cleared the reduction of tax rate on footwear and apparel priced up to Rs 2,500 to 5 per cent.
The Group of Ministers had already endorsed the proposal to streamline the GST regime into a two-rate system of just 5 per cent and 18 per cent. Further, it is expected that the new changes will take effect within the next few weeks, ahead of the festive season. In addition, the Council is likely to exempt health insurance premiums for senior citizens from GST and reduce rates on life-saving drugs.
Sources further said the health insurance premiums may also be shifted to a lower slab to provide relief to taxpayers. Micro, Small & Medium Enterprises (MSMEs) are also expected to benefit, with the government moving to ensure registrations can be completed within three days, down from the current multi-week process. However, Opposition-ruled states have pressed the Centre for compensation to cover revenue losses. Eight states—Himachal Pradesh, Jharkhand, Kerala, Punjab, Tamil Nadu, Telangana, West Bengal, and Karnataka—have demanded either compensation or detailed estimates of likely revenue erosion.
