GST Rate Overhaul: A Seamless Transition Awaits
The GST department is working with the industry on software upgrades for a smooth rollout of a new tax structure. Effective from September 22, GST will transition to a two-slab system of 5% and 18%, with a 40% rate on sin and luxury items. This change involves significant preparatory efforts to ensure functionality and address industry concerns regarding input tax credit utilization.
- Country:
- India
The Goods and Services Tax (GST) department is collaborating with industries to upgrade software systems ahead of the new tax structure rollout on September 22. This collaborative effort aims to ensure a seamless transition to the revamped tax format.
Sanjay Kumar Agarwal, Chairman of the Central Board of Indirect Taxes and Customs (CBIC), reassured industries about concerns related to the accumulation of input tax credit (ITC). Businesses will be able to utilize their accumulated ITC to manage new tax obligations, addressing potential worries about temporary ITC accumulation.
The GST overhaul will simplify the structure to two slabs of 5% and 18%, while imposing a 40% rate on sin and ultra-luxury items. As companies adapt their ERP systems to accommodate the changes, the CBIC anticipates a brief dip in monthly tax collections but expects revenue to stabilize in the following months.
(With inputs from agencies.)
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