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New Delhi: The GST council meeting is scheduled next month. According to the reports, the meeting will discuss plans to reduce taxes on several items. These include commonly used services such as cement, salons and beauty parlors, as well as life and health insurance premiums. Reports suggest that there is also a proposal to bring food items and clothing under the 5 percent slab. The GST Council is chaired by Union Finance Minister Nirmala Sitharaman. Members from all states are also part of it. The Council is scheduled to meet on September 3 and 4. A decision will be taken on reducing the tax slabs.
This will simplify the tax system and eliminate classification issues. The government wants to ensure there is no confusion regarding taxation.
There is a proposal to reduce the tax on cement from 28 percent to 18 percent. It is important to note that the construction and infrastructure sectors had been demanding this for a long time. Cement is an essential building material. It is expected that this move will bring down the cost for consumers.
However, this will only happen if companies pass on the benefit of the tax reduction to customers.
Some states, like West Bengal, have suggested raising the GST upper limit beyond 40 percent. However, sources say this could send a wrong signal. Moreover, it would require major changes in the law. The central government believes that small cars (up to 4 meters in length) should be taxed at 18 percent, while big cars should be taxed at 40 percent. Currently, these vehicles attract a total of 50% GST (28 percent GST plus 22 percent cess).
“The Prime Minister’s vision to unleash next generation reforms especially in the GST framework is far-sighted and will spur a virtuous cycle of consumption, investment, growth and employment. The Government’s resolve to ensure ease of living by enhancing affordability and accessibility of all items meant for daily consumption, including foods, for a large section of society will benefit the sizeable middle-class population, MSME’s and farmers. It will also promote ease and cost of doing business through a transparent, simplified and growth-boosting tax structure enabling enterprises to be more competitive and agile in a fast-evolving business environment,” Sanjiv Puri said.
“The proposed measures will also enable the formalization of the economy and a tax compliant society. The next generation reforms will undoubtedly strengthen the foundations of Atmanirbhar Bharat, fuel the spirit of enterprise, enable youth to pursue better opportunities and contribute substantially as India traverses a momentous journey to a Viksit Bharat,” he added
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