Revamped GST Regime Sparks Debate: Is It a True 2.0?
The GST Council's recent overhaul, termed 'GST 1.5' by the Congress, has been both praised and criticized. While rates for many goods are reduced under new slabs, key demands from states remain unaddressed. The outcomes in terms of stimulating investment and easing MSMEs' burdens remain uncertain.
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- India
The GST Council has approved sweeping changes to the Goods and Services Tax (GST) system, though Congress critiques it, dubbing it 'GST 1.5' instead of a full 'GST 2.0' transformation. While reduced rates on numerous goods are expected to boost consumer spending, significant demands from states have been overlooked.
Cuts to rates on everyday goods, such as hair oil and TVs, attempt to spur economic activity amidst global pressures. The Council simplified rates from four slabs—5, 12, 18, and 28 percent—to a streamlined two-tier system at 5 and 18 percent. A premium 40 percent rate is reserved for select high-end commodities.
Despite these major adjustments, Congress critic Jairam Ramesh emphasizes the ongoing wait for a 'true GST 2.0' and cites longstanding concerns, including the need for extended compensation to states. As economic impacts are anticipated, the move's effectiveness in addressing MSMEs' challenges remains to be seen.
(With inputs from agencies.)
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