GST Council Meeting: Proposal to remove 12% and 28% tax slabs approved, 175 items will be cheaper, see key highlights
In the 56th meeting of the GST Council, the proposal to remove 12% and 28% tax slabs has been approved. This information was shared by Finance Minister Nirmala Sitharaman in a press conference.
GST Council meeting was to be held for two days (3-4 September), but it ended in one day.
Sitharaman said that to simplify the existing structure, only two slabs 5% and 18% will be implemented from the first day of Navratri i.e. 22 September. This will make about 175 items cheaper. GST has also been abolished on health and life insurance.
Many food items will be GST free
Nirmala Sitharaman said that many food items including milk, roti, pizza bread, chenna will be GST free. Apart from this, tax on cement has been reduced from 28% to 18%.
40% GST on luxury items and tobacco products
Apart from this, 40% GST will be imposed on luxury items and tobacco products.
GST rate cut possible on 175 items
GST rates may be cut on about 175 items. These include food ingredients, almonds, snacks, ready-to-eat items, jam, ghee, butter, pickles, chutney, automobiles, tractors, electronics, AC and refrigerators etc. With the new rates, the average GST rate on all items will come down to below 10%, which is currently around 11.5%.
How people will be affected
Clothes and shoes will be cheaper: According to sources, the GST rate on shoes and clothes up to Rs 2,500 can be reduced to 5%, which will make them cheaper for the customers.
Health insurance and life saving medicines will be cheaper: The GST Council has agreed to cut the insurance premium rates, which will make it cheaper to take health insurance. Along with this, GST rates on life saving medicines are also expected to be reduced.
Tax on luxury electric vehicles will increase: According to a Moneycontrol report, the GST rate on luxury electric vehicles costing more than Rs 20 lakh may increase from 5% to 18%. If this proposal is approved, it can become a challenge for companies like Tata Motors, Mahindra, Tesla and Mercedes-Benz.
Quick registration for MSMEs and startups: Now the time taken for GST registration for Micro, Small and Medium Enterprises (MSMEs) and startups has been reduced from 30 days to just 3 days.
Automatic refund for exporters: Exporters will now get GST refund automatically. This proposal has also been approved, which will make their work easier.
Proposal for automatic return filing: The GST Council has also proposed to introduce an automatic return filing system, which will make it even easier to follow the rules related to GST.
#NextGenGST: PM
Prime Minister Narendra Modi has expressed his happiness that the GST Council, comprising the Union and the States, has collectively agreed to the proposals submitted by the Union Government on GST rate cuts & reforms, which will benefit the common man, farmers, MSMEs, middle-class, women and youth. "The wide ranging reforms will improve lives of our citizens and ensure ease of doing business for all, especially small traders and businesses", Modi stated.
The Prime Minister posted on X:
"During my Independence Day Speech, I had spoken about our intention to bring the Next-Generation reforms in GST.
The Union Government had prepared a detailed proposal for broad-based GST rate rationalisation and process reforms, aimed at ease of living for the common man and strengthening the economy.
Glad to state that @GST_Council, comprising the Union and the States, has collectively agreed to the proposals submitted by the Union Government on GST rate cuts & reforms, which will benefit the common man, farmers, MSMEs, middle-class, women and youth.
The wide ranging reforms will improve lives of our citizens and ensure ease of doing business for all, especially small traders and businesses."