GST Revamp on the Horizon

Since its inception in 2017, the Goods and Services Tax (GST) is poised for its first significant overhaul. The Prime Minister’s Office has given an in-principle approval for a substantial restructuring of the GST framework, with the 12% tax slab potentially being removed.

The new GST revamp proposal is expected to be presented to the GST Council following the monsoon session of parliament, with a meeting scheduled for August.

Current GST Slabs and Proposed Changes

The current GST framework includes five tax rates: nil, 5%, 12%, 18%, and 28%, with special rates for precious metals. Authorities are considering eliminating the 12% tax bracket, redistributing items between the 5% and 18% slabs.

Impact on Economy and Industries

This restructuring aims to benefit both consumers and businesses by simplifying tax procedures and modifying rates. The move is timely, with the government looking to remove obstacles for domestic industries amidst upcoming free trade agreements.

Industry representatives have advocated for these reforms, highlighting operational challenges and the need for a streamlined GST system to potentially boost economic growth.