GST Reforms Simplified: Only two slabs; 5 and 18 percent, big relief for consumers and small businesses
Prime Minister Narendra Modi has announced sweeping changes to the Goods and Services Tax (GST) aimed at giving relief to families and small businesses. The reforms, described as a “Diwali gift,” simplify the tax structure and promise to make daily-use and big-ticket items more affordable.
Main highlights of the new GST reforms:
- Simpler slabs: Current GST rates (0%, 5%, 12%, 18%, and 28%) will be streamlined to just two; 5% and 18%.
- Essentials Commidities in Lowest Slabs: Food items, medicines, and education materials will be only in the 0-5% slab, ensuring basics remain affordable.
- Lower grocery and health costs: Families can save on monthly essentials like groceries and healthcare expenses.
- Consumer goods get cheaper: Items such as refrigerators, washing machines, air conditioners, televisions, and cars, earlier taxed at 28%, will now fall under the 18% slab.
- Boost for housing: Cement, a key construction material, will also see a tax cut from 28% to 18%, reducing home-building costs.
- Support for small businesses: Most items in the 12% category will move to 5%, cutting compliance hassles and costs for MSMEs and traders.
- Stronger economy: By lowering taxes on essentials and daily-use goods, consumer demand is expected to rise, creating jobs and driving growth in sectors like automobiles, FMCG, logistics, housing, and retail.
For households, the changes mean lighter grocery bills, cheaper healthcare, and more affordable appliances. For businesses, it means simpler rules and lower costs. Together, the reforms are expected to boost spending and give the economy fresh momentum.
For a more detailed information on GST reforms and their impact on consumers, small businesses and the overall economy, please read the original article from DD News.
