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New rates of GST will be applicable from 5% and 18% 22 September.
Union Finance Minister Nirmala Sitharaman said on Wednesday that reforms made in Goods and Services Tax (GST) will contribute at least Rs 2 lakh crore to the country’s economy. This will save more money to the common people.
In an event held on ‘Next Jane GST Reforms’ in Visakhapatnam, he said that the GST rate cuts will save the countrymen by Rs 2 lakh crore. This is a major step for the Indian economy.
99% of the goods included in 12% slab 5% in tax scope
The Finance Minister said that 99% of the goods included in the 12% slab of GST have now come under 5% tax scope. Also, 90% of goods with 28% tax slab are now under 18%. He said that these changes will be very beneficial for middle class and will also help in reducing poverty.
Sitharaman also claimed that the benefits of GST reforms are 10 times more than the incentive amount given to many industry in the country.
The 56th meeting of the GST Council was held on 13 September under the chairmanship of Finance Minister Nirmala Sitharaman.
GST increase in revenue, number of taxpayers also increased
The Finance Minister said that since the implementation of GST, its revenue has increased to Rs 22.08 lakh crore by 2025. Apart from this, the number of GST taxpayers has also increased from 65 lakh to 1.51 crore. It shows that GST not only increased revenue, but also strengthened the base of taxpayers.
Only two slabs 5% and 18% instead of 4 of GST
Now only two slabs instead of 4 of GST will be 5% and 18%. This will also make common needs such as soap, AC, car with shampoo. It was decided in the 56th meeting of the GST Council. Finance Minister Nirmala Sitharaman gave this information on 3 September.
Sitharaman had told that many food items including milk, roti, paratha, chhena will be GST free. At the same time, individual health and life insurance will also not be taxed. 33 Life -saving medicines, rare diseases and medicines for serious diseases will also be tax free.
Luxury items and tobacco products will now be 40% GST instead of 28%. Medium and large cars, motorcycles with engine more than 350cc will come to this slab.
New rates of GST will be applicable from September 22
The Finance Minister had said that the new slabs will be implemented on the first day of Navratri, ie from 22 September. However, the new 40% GST rate on tobacco goods will not be applicable yet.
The purpose of these changes is to give relief to the common man, support small businesses and reduce their use by increasing taxes on harmful products such as tobacco.
Booking of hotel rooms cheaper, IPL tickets will be expensive
- GST has been reduced from 12% to 5% on the booking of hotel rooms, that too when the room fare is Rs 7500 or less per day.
- GST on beauty and health services has been reduced from 18% to 5%, such as gym, salon, barber shop, yoga center etc., which uses the common man.
- GST has been increased from 28% to 40% for entry in IPL such as casino, race club, or where there are casinos and race clubs, or sports events.
GST was implemented in 2017
The government implemented GST across the country on 1 July 2017. After this, 17 taxes and 13 centers of the central and state governments were removed. On the completion of 7 years of GST, the Finance Ministry posted with the achievements achieved during the last seven years.
GST is an indirect tax. It was implemented in 2017 to replace many types of indirect tax like VAT, service tax, purchase tax, excise duty. The GST had four slabs of 5, 12, 18 and 28%.
GST is divided into four parts:
- CGST (Central GST): is collected by the Central Government.
- SGST (State GST): It is collected by the state governments.
- IGST (Integrated GST): Applied to interstate transactions and imports, divided between central and state governments.
- Cess: Additional fees levied on specific goods (eg, luxury items, tobacco) to raise funds for specific purpose.
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