GST Success Hinges on Single Tax Rate, Report Recommends Two Slabs and Capped Peak Rate

• GST success depends on moving towards a single nationwide tax rate
• GST 2.0 should have two slabs: 5 percent and 18 percent, with a peak rate capped at 18 percent
• A 40 percent slab for luxury goods could lead to expansion and complexity
• Simplifying GST can reduce anomalies, illegal markets, and compliance burdens
• A ‘cess rulebook’ is suggested for predictability in tax planning
• GST Council to meet on 18 to 19 September to discuss the proposal
• Reform package focuses on structural reforms, rationalised rates, and ease of living
• Finance Minister briefed ministers on reducing tax rates and easing compliance
• Current GST rates are 5, 12, 18, and 28 percent
• Proposal to eliminate 12 and 28 percent brackets to simplify structure
• Goods to be classified as ‘merit’ at 5 percent and ‘standard’ at 18 percent
• 99 percent of items in the 12 percent category could shift to 5 percent

Source: a2ztaxcorp.net

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.

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