- India plans to reform the GST system with a simplified two-rate structure.
- Current GST rates of 5%, 12%, 18%, and 28% will change to 5% and 18%.
- Goods taxed at 12% will move to 5%.
- 90% of goods under 28% will shift to 18%.
- A new 40% rate will apply to 5 to 7 demerit goods like tobacco.
- Essential goods will continue to have a 0% GST rate.
- Special rates will remain for sectors like gems and jewellery.
- Changes expected around Diwali 2025 after GST Council approval.
- A panel of state finance ministers is reviewing the proposal.
- Reform aims to simplify tax structure, boost consumption, and support small businesses.
- A task force will suggest further reforms for economic growth.
- Follows earlier income tax cuts in the 2025 Union Budget.
Source: globalvatcompliance.com
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.
