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Next Gen GST Reforms: Prime Minister Narendra Modi On Independence Day, he made a big announcement of GST reforms in his speech from the ramparts of the Red Fort. After the announcement of PM Modi, the Finance Ministry also made it clear that the government is currently working towards simplifying the GST structure. According to news agency PTI, officials believe that this improvement will lead India to “single tax system” in future and by 2047, a uniform tax rate may be applicable in the country.
Single tax system by 2047
At present, there are four slabs in GST – 5 percent, 12 percent, 18 percent and 28 percent. Under the new proposal, 12 percent and 28 percent slabs will be abolished. After this, most of the items will be absorbed in the rate of 5 percent and 18 percent. At the same time, it has been suggested to keep a special 40 percent tax rate for luxury and harmful items.
Officials say that this change will boost the economy and consumers will get relief from tax burden. It is being called “Next Generation GST”, as it is considered to be the most important step in the category of India’s economic reforms.
New GST reforms till Diwali
The government wants this new system to be implemented by Diwali. For this, the Center has sent a proposal to a group of finance ministers of the states. This group will study the proposal and keep its recommendation in the meeting of the GST Council to be held in September. If the council approves it, then before Diwali, consumers can start getting many items cheaper.
According to the senior official, when this new system is fully implemented and India reaches the category of developed countries, then the government can consider implementing the same rate of GST. He said that this model is suitable for developed countries, because there is almost the same to the citizens’ income and spending. However, this is not the right time for India right now.
