The reforms announced by the Prime Minister during the Independence Day Speech on 15th August have been finally passed by the GST Council and are expected to come into effect from 22nd September. A lot of goods will be impacted due to the changes, benefiting many consumers. Food items of everyday use are mostly shifted from the 18% slab to 5% slab, and other items that were easier charged at a 28% tax will be reduced to 18%. The new set of tax rates will come into effect on the first day of the Navratri festival this year, giving a major relief and acting like a bonus for consumers, as the Prime Minister stated in his speech.
The BJP government stated that the GST, which was tagged as the “Gabbar Singh Tax” by Congress Minister Rahul Gandhi in 2017, has become simple and flexible. When the tax was imposed, it was called out by the opposition parties, but a few years down the line, consensus says that the tax has not only benefited the consumers but has also eased doing business, and the latest reforms will only add to the merits. Explaining the long delay in imposition of the new reforms, the Finance Minister clarified that though the reforms will ease the burden due to Trump’s tariff, it is not introduced due to the tariffs.
She further said that the government was planning the reforms for more than a year and was to be introduced; the clash of situations is just a coincidence. She also stated that the long delay was due to economic and administrative factors, as GST reform is a major step that takes a lot of factors into account. The new slabs are 5%, 18%, and 40% for sin goods and luxury goods. The reforms have also made GST on certain products Nil.
Essential food items like parathas, chapati, paneer, khakra, and pizza-bread will be charged zero GST. Certain stationery, like pencils, notebooks, erasers, and maps, have also been reduced to zero. Other goods used by an average Indian consumer are reduced to the 5% slab, and these include Beverages and food, ghee, butter, and personal products like toothpaste, powder, and soap. Air conditioners, televisions up to 32 inches, and small cars have also reduced from 28% to 18%.
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