Nirmala Sitharaman gave this information on the change in GST rates

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The change in GST rates can reduce the tax burden on everyday essential items. Especially food items, agricultural machinery and general goods used by the middle class can become cheaper.

Finance Minister Nirmala Sitharaman said that the common man, farmers and the middle class will directly benefit from the improvement in GST rates. She said this during a conversation with the Group of Ministers (GoM) of the GST Council. The government believes that more relief can be given to the people by simplifying the tax structure.

Changes in GST rates can reduce the tax burden on everyday essential items. Especially food items, agricultural machinery and common goods used by the middle class can become cheaper. This will also control inflation to some extent and there will be less pressure on people’s pockets. The government’s focus is now on creating such a tax system that will generate adequate revenue and will not put too much burden on the public. If these reforms are implemented, it will be a big relief for the common people and at the same time farmers and the middle class will also get economic benefits.

What did the Finance Minister say?

Sitharaman, in a meeting with the Groups of Ministers (GoMs) of the states formed on reforms in Goods and Services Tax (GST), said that the Center’s proposal on GST reforms is based on three pillars of structural reform, rationalization of rates and making life easier. Groups of ministers on rationalization of GST rates, taxation on insurance and compensation cess met with Sitharaman to propose comprehensive reforms in the GST system.

During the meeting, Sitharaman emphasized that this proposal of the Central Government is with a view to starting the next generation GST reforms in the country’s journey to become self-reliant. The three ministerial groups will discuss the Center’s ‘next generation’ GST reforms for two days, under which only two rates of five and 18 percent have been proposed. Apart from this, a special rate of 40 percent tax has been kept on luxury and harmful products.

Let us tell you that at present GST is levied at the rate of five, 12, 18 and 28 percent. Zero or five percent tax is levied on food and essential commodities. At the same time, luxury and harmful goods are taxed at the rate of 28 percent, on which cess is also levied. Sitharaman addressed the ministerial groups for about 20 minutes in which she discussed in detail the tax reform proposal put forward by the Center.

It proposes to reduce tax rates and reduce the compliance burden for businessmen. The ministerial group formed to rationalize the GST rate has been entrusted with the responsibility of changing the tax slabs and rates and ending the problem of duty inversion in some areas. This group will meet again on August 21.

There will be relief in the insurance sector

The Group of Ministers on Insurance is considering reducing the tax rate on health and life insurance premiums, while the group on compensation cess will decide on the future of the cess after the loan repayment period. After getting the approval of the GoM on these proposals, they will be placed in the GST Council meeting next month. The GST Council alone has the right to take policy decisions on GST related matters. Prime Minister Narendra Modi had announced the implementation of GST reforms by Diwali in his Independence Day address.

 

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