New Delhi29 minutes ago
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The government believes that small cars and entry-level bikes are not luxury items. Therefore, there should be less tax on them. (File photo)
Preparations for GST 2.0 i.e. Next Jane GST are in the final stages in the country. The central government has sent the draft GST reforms to the states. It is expected that all states will cooperate in this, so that it can be implemented before Diwali. The Center claims that GST reforms will provide relief to poor and middle class people as well as small and big businessmen.
According to the new proposal, small cars will be cheaper, while luxury can be more expensive. The government believes that small cars and entry-level bikes are not luxury items. Therefore, there should be less tax on them.
The reduction of tax may increase the sales of small cars and cheap bikes, which are currently under pressure due to the increasing demand for premium models. Luxury car and bike can be placed in a special tax slab of 40%. Similarly, 3% will be applicable on gold and silver as before and 0.25% on diamonds.
Finance Minister and his team working for two and a half years on GST 2.0 Finance Minister Nirmala Sitharaman and his team have been working for the last two and a half years on the proposed changes of GST 2.0. Their goal is to create a system that is not only simple but can also stop tax evasion and fraud. Now it will be discussed in the next meeting of GST Council.
The central government has already sent this proposal to the Group of Ministers. The group will submit their recommendations to the GST Council. These will be discussed in the next meeting of the council and the same will take the final decision. The government is confident that this time there will be no opposition from non -BJP ruled states, because in this proposal, the poor, farmers and middle class have been given direct relief.
Cess may end from October-November The government is preparing to end the cess from October-November. Apart from this, there is a proposal to bring health and agricultural insurance into 0 to 5% GST slab. The government’s emphasis is that the benefit of reduction in rates reaches the common consumer directly. The purpose of this major reform is not only to give relief to consumers, but also promote domestic consumption and strengthen the economy amidst global tariff hazards.
This system is being considered as a big step towards single slab GST in future. According to officials, less tax directly means more money in people’s pockets. This will increase consumption and speed up the economy. According to government sources, the new structure has been prepared in such a way that there is no demand for changes in repeated rates and the problem of input tax credit (ITC) should also end.
Ban on shell companies, because this year fake claim of 1 thousand crores caught With this reform, not only the common consumer, but also the tax system will be transparent. Till now thousands of rock companies were standing due to imbalance in tax rates. These companies used to claim fake tax credit by taking advantage of the difference between input and output tax. This forgery will not be possible due to the balance of rates in the new system. In the same year, a fake claim of more than Rs 1,000 crore has been caught through rock companies. The government hopes that this will end completely.
Government claims, loss will decrease if consumption increases
- According to the new proposal, most of the goods and services will be placed in two slabs. Currently 4 slabs are 5%, 12%, 18% and 28%. After the improvement, two slabs will remain 5% and 18%. This will make 99% of items like butter, fruit juice, dry fruits under the purview of 12% GST.
- 90% of items like cement, AC, TV, fridge, washing machines within 28% tax will fall into the slab of 18%. However, there will be a special slab of 40% on luxury and harmful items (such as tobacco, gutkha, paan masala and online gaming).
- The government estimates that the consumption of common goods will increase due to decrease in tax rates. If consumers shop more, then the flow of cash in the market will increase. This will also strengthen industries and create employment opportunities. Sectors associated with the self -sufficient Bharat Abhiyan will be particularly benefiting. The government says that due to both these reasons the deficit will be completed and the economy will move rapidly.
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