GST Overhaul Approved: Reducing Rates to Boost Economy
The GST Council has approved a major overhaul of the Goods and Services Tax regime, reducing tax slabs from four to two—5% and 18%—effective September 22. The changes aim to boost domestic spending and counteract US tariffs, potentially increasing economic growth by 0.5 percentage points.
- Country:
- India
The Goods and Services Tax Council has given its nod to a significant restructuring of tax slabs, streamlining them from four bands to just two. This initiative, led by Union Finance Minister Nirmala Sitharaman, aims to invigorate domestic consumption and cushion the economy against external pressures.
Starting September 22, everyday commodities, from personal hygiene products to food items, will enjoy reduced GST rates. The intention is to lower consumer prices and increase spending power, especially with impending US tariffs creating economic ripples. Some specialized goods will still face higher rates, but essentials and popular categories will see welcome reductions.
Ultimately, the GST overhaul signifies a government effort to simplify taxation while encouraging consumer behavior that sustains economic health. Analysts predict a potential 0.5 percentage point rise in economic growth, counterbalancing international trade challenges.
(With inputs from agencies.)
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