FM to Head GST Panel Talks on Reforms
Finance Minister Nirmala Sitharaman will brief three ministerial groups of the Goods and Services Tax (GST) Council in New Delhi this week. The groups will discuss rate rationalisation, health and life insurance, and phasing out the compensation cess.
Proposal to Simplify GST Slabs
The government is considering moving from the current four-tier structure to two main slabs. The proposed system would retain a 5% slab for essentials and an 18% slab for most other items, while luxury and sin goods could face a 40% rate. Goods in the 12% and 28% brackets may be shifted into these new categories.
Compensation Cess May End by December
The compensation cess, originally imposed to make up state revenue losses after GST was introduced, could be withdrawn by December. This would mark a major structural change in India’s indirect tax system.
Expected Boost to Consumption
These reforms, along with recent income tax relaxations, a good monsoon supporting rural incomes, and the possibility of RBI rate cuts, are expected to strengthen consumption demand across sectors. The government sees this as a way to stimulate the economy and provide relief to households.vs the proposed ones for clarity?
