Thursday, October 9News That Matters

All Food, Textile Items Likely To Come Under 5% GST Slab

New Delhi: The Goods and Services Tax (GST) Council is set to consider a major restructuring of tax rates in its upcoming meeting on September 3 and 4. The plan includes moving all food and textile products into the 5% slab, lowering taxes on cement and popular services, and reducing levies on individual health and life insurance.

According to sources, the levy on cement may be slashed from 28% to 18% a relief that the construction and infrastructure sectors have been demanding for years. The move could lower costs for end consumers, but the government expects the cement industry to pass on the benefits rather than hold prices high.

The council is also reviewing services such as salons and beauty parlours. While small neighbourhood salons are already exempt, mid- and high-end services currently taxed at 18% may soon come under the 5% slab, reducing consumer costs.

For individuals, GST on term assurance and health insurance policies could be reduced to zero, a step aimed at encouraging more people to buy critical financial protection.

The Centre has also proposed simplifying the GST structure into just two main slabs 5% and 18% with a 40% rate kept aside for sin and luxury items such as big cars. Currently, small cars may fall into the 18% category, while bigger models could attract 40%, down from the existing 50% (28% GST plus 22% cess).

Officials said the new structure is based on eight years of GST experience and aims to strike a balance between consumer relief and government revenue. “When GST was introduced, the focus was revenue neutrality. Now we are moving towards a simpler regime that benefits both the exchequer and the public,” an official explained.

While some states including West Bengal, have suggested raising the GST ceiling beyond 40%, the Centre believes such a move would send a negative signal and require major legal changes.

If approved, these changes would mark one of the most significant overhauls of India GST framework since its introduction in 2017, bringing relief to households and boosting sectors like construction, insurance, and consumer services.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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