Govt delivers ‘GST Diwali bonanza’: Essentials cheaper, big relief on insurance premiums
Finance Minister Nirmala Sithaman said that new rates will come into force on September 22, the first day of Navratri and the beginning of the festival season, and Prime Minister Narendra Modi will fulfill the promise of GST Diwali Bonanza Independence Day.
Sithaman, “We reduced the flooring” We corrected the opposite task … These reforms were held in mind the ordinary man, “he said.
GST will now eliminate 12% and 28%, to a two -layer structure with a rationalization that is expected to reduce prices and increase consumption, to 5% and 18%. It is expected to simplify compatibility and increase the ease of doing business by providing growth in the climate of global economic uncertainty. The increase in reforms to the economy was fixed by 20-30 basis points that balance the impact of 50% US tariffs.
The net financial impact of these tax cuts is estimated to be 48,000 RS, but the Ministry of Finance expects to swim as it will balance the ratio rationalization and the effect of better adaptation.
Reverse structure correction
Read also: GST Council reduces tax plates to two to promote consumption.
“The whole exercise will be financially sustainable for both the central and states, Arv Revenue Secretary Arvind Srivastava said. The authority said that since the council expects the industry to transfer the advantages of tax reduction to the consumer, there is no movement that will bring back complex measures.
Council, which came together under the chairmanship of Sithaman, brought all ‘sin’ items such as tobacco products and super luxury items to a 40% special sign. This will also apply to ventilated water, carbonated beverages, caffeine drinks, medium -sized and large cars, more than 350 cc motorcycles, aircraft for personal use and yachts. However, the new ratio for tobacco products, Gutkha and Pan fairy tale will not enter into force and compensation Cess will continue to be taken to them until the state loans are repaid.
Approximately 400 products, such as food products, oil, bath supplies, air conditioners, large television sets and distinguished consumer strengths, small cars, motorcycles, automobile components, glasses, cement and life -saving and cancer drugs, approximately 400 products will face lower tax rates.
An important reform reduces the GST to the Nile to individual health and life insurance premiums, and the Council agrees to exempt them from 18% of taxes.
Most of the daily use items will be scrapped by scrapping 12% of 5% brackets. Some products such as Indian breads and panels will face Nile tax. Others, such as cement and small cars on 28% signs, will be moved to 18%.
These changes try to correct the inverse task structure in GST and to reduce the accumulation of input tax loan to add the classification problems in goods. Sithaman, “This reform was the need for the watch, Sit said Sithaman, accompanied by process reforms to facilitate companies to do business, he added.
Lifting expenditures
Since the launch of multiple states and central taxes and transforming India into a common market since July 1, 2017, GST has special rates (5%, 12%, 18%and 28%). In order to compensate for any income loss in the transition, a compensation team was introduced to luxury and debit goods between 1% and 290%. This compensation team is being removed.
The Prime Minister said the GST reform was close in his independence day speech. “I will do this a double diwali for you ık We have discussed with states and bring new generation gst reforms that will reduce the tax burden,” he said.
Sithaman said on Wednesday, “We are all together for the common man… Every state has accepted and supported the Minister of Finance.”
Economists expect reform to remove the expenditure activities and GDP. Support for nominal GDP growth is estimated as 20-30 BPS. The Indian economy grew by 7.8% in the first quarter and 8.8% with nominal terms.
Hdfc Bank’s chief economist Sakshi Gupta said, “The rationalization of GST is expected to increase consumer demand in H26’s H2 and add about 20 BPS to GDP growth.” “This can help balance some negative effects of higher tariffs on the growth of this financial year. Low medium -income households will benefit from the highest price sensitivities, considering the highest rate of sensitivities.”
Other changes
The ease of making job measures of the council is to ensure that the GST registration process is completed within three days in non -risky initiatives. Refunds stuck due to the inverse task structure in export -intensive sectors such as textile, chemicals, fertilizers and pharmaceutical sectors will be cleaned within seven days. The Council has approved changes in the definition of supply for intermediaries, a movement that allows Global Talent Centers (GCCs), data centers and IT services to request input tax loans.
A simplified process has also been approved to automatically register those with a total tax liability that does not exceed 2.5 Lakh RS per month. The latest GST reform is based on three columns – structural reforms, ratio rationalization and ease of life.
Sithaman, structural reforms “will provide stability and predictability by providing long -term clarity and policy aspect on the proportions and policy aspects to create industry confidence and support better business planning.
Revamp said it would facilitate the function of companies at an event in Chennai on Tuesday. “New generation GST reforms … an economy will be absolutely open and transparent in the coming months and will facilitate the development of small enterprises with further decrease in compliance burden,” he said.
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