Government Unveils Landmark GST Reform: Daily Essentials to Become Cheaper

Quick Summary

• The Indian government has proposed a major GST reform, simplifying the current four-tier tax structure into two primary rates: 5% and 18%, with an additional 40% slab for luxury and sin goods.
• 99% of items taxed at 12% are expected to move to the 5% slab, while 90% of goods in the 28% category will shift to the 18% rate.
• Everyday consumer products like processed food, snacks, soap, hair oil, toothbrushes, footwear, cookware utensils, and basic electronic gadgets are anticipated to become cheaper.
• A new GST rate of 40% is set for luxury goods such as tobacco, pan masala, and online gaming.
• PM Narendra modi announced these reforms as part of his Independence Day speech while promising important benefits for households and businesses during Diwali.
• The GST Council will meet in September for discussions on implementation after consultations with state governments and stakeholders.

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