Major Tax Reforms on the Agenda
New Delhi, Sept 3: The 56th meeting of the GST Council kicked off today, with expectations of major reforms in tax slabs. Reports suggest that several essential goods may become cheaper if the Council approves proposed rate cuts.
Items Likely to Get Cheaper
Goods such as packaged spices, footwear, textiles, medicines, tractors, dry fruits, ghee, and butter may see their GST reduced from 12% to 5%. In addition, high-demand items like ACs, refrigerators, televisions, and cement may shift from the 28% slab to 18%, making them more affordable for consumers.
What Could Get Costlier?
While essentials may get relief, luxury and harmful products could attract higher taxes. Alcohol and premium goods may see increased GST rates as part of the government’s “discourage consumption” policy.
No Change in Petroleum & Gold
Petrol, diesel, gold, and diamonds will continue to be taxed under the current slabs. Essential food items such as paneer, roti, pizza bread, and chapati may either remain tax-free or stay in the 5% bracket. Medical supplies and stationery are also likely to be spared.
Impact on Revenue
As per Ambit Capital’s “GST 2.0” report, the changes could result in a revenue loss of ₹0.7–1.8 trillion for the Centre and states combined. However, the government is expected to balance this by raising taxes on luxury and sin goods.
