Effective September 22, India is implementing a revised Goods and Services Tax (GST) structure nationwide. The updated framework primarily establishes two main tax slabs: 5 percent and 18 percent, while a higher 40 percent rate has been reserved for specific categories of goods and services.
Key adjustments include:
- Reduced Taxation: Small cars with engine sizes below 1,200cc are set to experience a GST reduction from 28 percent to 18 percent, with two-wheelers also potentially moving to a lower slab. Essential consumer goods, such as soaps, snacks, and packaged foods, are anticipated to be subject to reduced GST. These automotive tax adjustments are projected to stimulate sales, potentially benefiting major auto manufacturers.
- Higher Taxation (40% “Sin Tax” Slab): Several items will continue to face elevated taxation under the 40 percent slab. These include tobacco, alcohol, pan masala, online betting and gaming platforms, and luxury items like diamonds and precious stones. Petroleum products remain outside the GST framework and will therefore not experience any rate changes under this revision.
Source: www.livemint.com