Major GST reset on the cards? Council mulls scrapping 12% slab, lowering tax on insurance, says report
According to an TOI report, it is the proposal to re -evaluate the tax rates on the agenda high on the agenda and to cut the load on products such as air conditioners on the highest sign.
Compensation Strategy Strategy
Another critical issue is compensation-a pool of funds published by the centers to states to balance the income losses related to GST.
With this regulation, which ended in March, TOI reported that the Council is expected to prepare plans to protect income flows by continuing to receive additional tax on products such as tobacco and other “sin goods”.
If it disappears without an alternative, states are worried about potential income deficiencies. This fear has often reluctant tax cuts, even if such deductions are thought to be useful for consumers.
Possible to relax for insurance policies
Among the proposals, GST said that the GST is a movement to completely eliminate the pure insurance policies and shift them from the current 18% to zero tax bracket. The life insurance industry claims to reduce the tax to 12%, while the center seems to be tendent to go further to support the middle -class buyers. Health insurance may also be relieved, but no last call has been made yet.
12% SLAB under review
According to the report, one of the most important changes on the table is to completely scrape the 12% GST sign.
While these articles can reduce taxes, the authorities think that the goods used by the enterprises first need to pass on a higher rate to protect income.
Authorities familiar with negotiations said that the final decision was made to TOI.
They stated that any revision should balance the rationalization target with financial cautiously.
Income and consumption balancing
If the center means increasing consumption, it is open to accept some loss of income.
According to TOI, the authorities argue that a completely arithmetic approach usually cannot achieve longer -term earnings of higher sales volume, which usually follows tax cuts.
However, this approach may require comprehensive discussions and consensus between states that are still skeptical about income impact.
Need a stable frame
Negotiations on GST simplification have been going on for more than a year, but a breakthrough remained difficult.
The minister group in charge of rationalization and insurance has proposed incremental adjustments instead of a wide reset.
Sources, TOI, said that intention is now a more predictable tax structure that reduces the need for frequent revisions and provides clarity to both businesses and consumers.
