After income tax, now GST rate will be cut!
After the reduction in income tax rate, now GST rates are going to be reduced. Finance minister nirmala sitharaman herself has indicated this. The Finance minister said, the work of rationalizing the Goods and services Tax rate and slab is almost in its final stage and a decision to reduce the rates will be taken soon.
Responding to a question at 'The Economic Times Awards', nirmala sitharaman said, "The work of rationalizing GST rates and slabs is almost in its final phase. She said that the Revenue Neutral Rate (RNR) has come down from 15.8 percent at the time of introduction of GST on July 1, 2017 to 11.4 percent in 2023, and it will come down further. The GST Council, headed by the Finance minister, constituted a Group of Ministers (GoM) in september 2021 to rationalize the rates and suggest changes in the slabs.
The Finance minister said, "The GoM has done a great job, but now at this stage I have once again taken the initiative to fully review the work of each group, and then maybe I will take it to the Council. Then it will be considered whether we can reach a final conclusion about this or not.'' nirmala sitharaman said that some more work needs to be done on rationalizing the rates. She said, "We will take it to the next council meeting. We are very close to taking a final decision on some very important issues, such as rate cuts, rationalization, considering the number of slabs, etc.''
Actually there is pressure on the government to promote demand and consumption, for which the GST Council is now considering cutting GST rates. It is believed that the government can abolish the GST rate of 12 percent slab. And the goods coming in this slab can be put in 5 percent or 18 percent slab if needed. The purpose of this exercise is to increase consumption along with rationalizing the GST rate structure.
In fact, for a long time, there has been a demand to change the GST slabs and rationalize the rates. Currently, there are four tax slabs under GST. Those four slabs are 5%, 12%, 18% and 28%. There is a provision for a separate cess on some luxury and sin items. There has been a demand to reduce the number of GST slabs from 4 to 3.
click and follow Indiaherald WhatsApp channel