- A government think tank has proposed the end of GST exemption.
- The think tank argues that tax exemptions benefit the rich more than the lower strata of consumers.
- The Central Board of Indirect Taxes and Customs chairman supports the end of exemptions to simplify the GST structure.
- Currently, essential and basic goods and services are exempt from GST.
- The think tank’s study found that exempted items account for only 20% of a low-income household’s monthly expenditure.
- There are currently nine tax slabs in GST.
- The study considered 123 major groups of items to determine the distributional impact of taxes and exemptions.
- The lowest income households spend around 20% of their money on GST-exempt items.
- The lowest income group spends around 35% of their money on items taxed at 5% GST.
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.