There is going to be a big change in the country's tax system. The GST Council, chaired by Finance Minister Nirmala Sitharaman, is going to meet on September 3 and 4, during which a decision will be taken on the new GST slabs. The government aims to implement the new GST rates by September 22, so that consumers can get direct benefit from it during festivals like Navratri and Diwali. Prime Minister Narendra Modi announced in his Independence Day speech on August 15 that the government would bring 'Next-Generation GST Reforms'. He said that these reforms would reduce the tax burden of the common man and called it a 'gift' for the country on festivals.

What will be the new structure?

At present, GST is divided into four slabs - 5%, 12%, 18% and 28%. But now the central government has proposed to change it into two rates: 5% and 18%. In this, 5% tax will be levied on those items which will be considered 'essential' or 'merit goods', while the rest of the services and products will be taxed at 18 percent. Apart from this, a special tax of up to 40 percent will be imposed on products like tobacco and ultra-luxury cars. This step is being taken so that the tax burden on expensive and 'sin goods' remains, but the general public gets relief.

Reforms based on three pillars

The government says that these reforms are based on three major pillars -

Structural reforms: This includes correcting the inverted duty structure of industries and removing the problems of tax classification.

Rate rationalization: That is, making tax rates stable and easy by reducing the slabs, so that the common man gets relief.

Ease of business: Easy registration for startups, pre-filled returns, and fast refund process.

When will the new taxes be implemented?

According to government sources, the notification will be issued within 5 to 7 days of the decision of the GST Council. This means that by the end of September, new GST rates will be implemented across the country. This step is being considered an important reform towards making India self-reliant and becoming the third-largest economy in the world.

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