New GST Regime Set to Simplify Tax Structure and Boost Economy

The central government has announced a major revamp of the Goods and Services Tax (GST) structure, set to be implemented by Diwali. The new proposal features two primary tax rates of 5% and 18%, phasing out the existing multiple tax slabs of 12% and 28%, according to highly placed sources.

This strategic initiative, which has already been sent to the panel of state finance ministers for discussion, is intended to make GST rates more rational. The GST Council is expected to deliberate on this proposal in their upcoming meeting slated for next month.

The reformed GST is projected to significantly boost consumption patterns, benefiting sectors such as textiles, automotive, and agriculture. Although the initial reform may lead to a gap in revenues, government officials assure the gap will be offset in the following months, with the new scheme to be rolled out by the early third quarter.

(With inputs from agencies.)