12% & 28% GST slabs set to go, sin goods face 40% levy
NEW DELHI: Eight years after the launch of goods and services tax, the Centre has circulated the blueprint for GST 2.0, with two main slabs of 5% for common use items and 18% for other goods as it seeks to make life simpler and less taxing for citizens and businesses.
The comprehensive revamp plan - which will be discussed by a group of state finance ministers on Thursday - proposes to bring the curtains down on the 12% and 28% slabs, while ending compensation cess ahead of the March deadline, and tax sin goods at 40%.
Food, medicines and medical devices, stationary and educational products and everyday essentials, such as hair oil and toothbrush, will be in the nil or 5% slabs, officials said.
Items used by the middle class, such as ACs, TV sets and refrigerators will move into the 18% slab, although there was no clarity on how govt intended to tax automobiles and cement, which currently attract a 28% levy.
GST 2.0
Besides, there will be a major cut in GST on health and term insurance, which has been on the table for several months.
Apart from insurance, automobiles, health, handicrafts, farm goods, textiles, fertilisers and renewable energy have been flagged among sectors with special emphasis.
Reduction in slabs will end classification disputes over namkeens, parathas, buns and cakes and several other products due to varying rates on ingredients. Special rates of 0.25% on diamonds and precious stones and 3% on jewellery will be retained to promote specific industries, govt sources said while unveiling the plan.
"We have suggested a very simple, well reformed, next generation GST... Broadly, tax incidence will come down because rates on bulk of the items in 12% and 28% slabs will come down," a senior govt official said. The plan is to move 99% of the mass-use items in 12% slab to 5% bracket, with a small set moving to 18%. The proposed changes, which need to be endorsed by the GST Council, will end the patchwork that has been going on since 2017 , with every meeting of ministers resorting to small tweaks.
As a result, the weighted average tax rate, which had come down to 11.6%, will drop further.
Officials explained, apart from the common man, special emphasis has been given to equipment used by farmers.
Stay informed with the latest
business
news, updates on
bank holidays
,
public holidays
, current
gold rate
and
silver price
.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Scroll.in
34 minutes ago
- Scroll.in
Setting deadlines for president, governors can cause ‘constitutional disorder': Centre tells SC
Imposing fixed timelines on governors and the president to act on bills passed by state Assemblies would amount to one organ of the government assuming powers not vested in it by the Constitution, PTI quoted the Centre as telling the Supreme Court. Such a move could lead to 'constitutional disorder', it added. The Centre's submission was in response to a notice issued by the Supreme Court on July 22 to the Centre and all state governments on a reference made by President Droupadi Murmu about the court's April 8 ruling that set deadlines for governors and the president to grant assent to bills. A constitution bench comprising Chief Justice BR Gavai and Justices Surya Kant, Vikram Nath, PS Narasimha and AS Chandurkar is hearing the matter. In a written reply on August 12, Solicitor General Tushar Mehta stated that the judiciary does not hold answers to all problems in a democracy. 'The alleged failure, inaction or error of one organ does not and cannot authorise another organ to assume powers that the Constitution has not vested in it,' PTI quoted Mehta as stating. He added: 'If any organ is permitted to arrogate to itself the functions of another…the consequence would be a constitutional disorder not envisaged by the framers [of the Constitution].' The April 8 ruling came on a petition filed by the Tamil Nadu government after Governor RN Ravi did not act on several bills for more than three years before rejecting them and sending some to the president. The court held that governors must decide on bills within a reasonable time and cannot delay indefinitely under Article 200. Similarly, the president must act within three months under Article 201, and any delay beyond that must be explained and communicated to the state government. Both provisions outline the process of assent to bills by governors and the president. The judgment had also introduced the concept of 'deemed assent' in cases of prolonged inaction, allowing pending bills to be considered approved. In May, Murmu made the reference to the court under Article 143(1) of the Constitution with regard to its April 8 ruling. Article 143(1) allows the president to ask for the opinion and the advice of the court on matters of legal and public importance. In his note, Mehta argued that the positions of governor and president are 'politically plenary' and represent 'high ideals of democratic governance'. Any perceived lapses must be addressed through political and constitutional mechanisms, and not necessarily through judicial interventions, he added. Challenging the April 8 ruling, Mehta said that Articles 200 and 201 deliberately contain no timelines. 'When the Constitution seeks to impose time limits for taking certain decisions, it specifically mentions such time limits,' PTI quoted Mehta as stating. 'Where it has consciously kept the exercise of powers flexible, it does not impose any fixed time limit.' 'To judicially read in such a limitation would be to amend the Constitution,' Mehta added.
Hans India
34 minutes ago
- Hans India
Deadline for Prez, Guv will tilt power balance: Centre
New Delhi: Imposing fixed timelines on governors and the president to act on bills passed by a state Assembly would amount to one organ of the government assuming powers not vested in it by the Constitution and lead to a "constitutional disorder", the Centre has told the Supreme Court. The Centre has said this in the written submissions filed in the Presidential Reference raising constitutional issues on whether timelines could be imposed for dealing with bills passed by a state Assembly. "The alleged failure, inaction or error of one organ does not and cannot authorise another organ to assume powers that the Constitution has not vested in it. If any organ is permitted to arrogate to itself the functions of another on a plea of public interest or institutional dissatisfaction or even on the justification derived from the Constitution ideals, the consequence would be a constitutional disorder not envisaged by its framers," it has note filed by Solicitor General Tushar Mehta has argued that the apex court imposing fixed timelines would dissolve the delicate equilibrium that the Constitution has established and negate the rule of law. "The perceived lapses, if any, are to be addressed through constitutionally-sanctioned mechanisms, such as electoral accountability, legislative oversight, executive responsibility, reference procedures or consultative process amongst democratic organs etc. Thus, Article 142 does not empower the court to create a concept of 'deemed assent', turning the constitutional and legislative process on its head," the note says. The positions of the Governor and Oresident are "politically plenary" and represent "high ideals of democratic governance". Any perceived lapses, the note says, must be addressed through political and constitutional mechanisms, and not necessarily through "judicial" interventions. The perceived issues, if any, deserve political answers and not necessarily judicial, Mehta has submitted. Challenging the decision of the apex court, Mehta has contended that Articles 200 and 201, which deal with the governors' and president's alternatives after receiving a state bill, deliberately contain no timelines. "When the Constitution seeks to impose time limits for taking certain decisions, it specifically mentions such time limits. Where it has consciously kept the exercise of powers flexible, it does not impose any fixed time limit. To judicially read in such a limitation would be to amend the Constitution," Mehta has said.
Time of India
an hour ago
- Time of India
Trump-Putin talk, GST reform and FII action among 9 factors to impact stock markets this week
Indian benchmark indices finally ended their six-week losing spree to end 1% higher every week. A host of important domestic and global events scheduled for the week are likely to impact stock markets when they resume trading on Monday. On Thursday, Nifty closed 11.95 points or 0.05% higher to end the day at 24,631.30. The markets were closed on Friday on account of Independence Day. Commenting on the current trends Nilesh Jain, Head – Technical and Derivatives Research Analyst (Equity Research) at Centrum Broking said that markets staged a strong rebound as the Nifty index ended its six-week losing streak and formed a bullish candle on the weekly chart. The index reclaimed its 100-DMA at 24,560, which will now serve as an immediate support, he said. "Over the past month, the Nifty has struggled to cross its short-term 21-DMA at 24,770. A decisive move above this level is crucial to unlock further upside towards 25,000. The RSI has turned higher to 44, indicating improving momentum, while the MACD remains below the zero line. Although sentiment has improved, a clear confirmation of a trend reversal is still awaited." Factors that are likely to impact movement when markets reopen this week: 1. Trump-Putin talk The understanding reached between US President Donald Trump and Russian President Vladimir Putin on the Ukraine issue on Friday is expected to lift market sentiment when trading resumes on Monday. Although the two leaders stopped short of striking a deal to end the war, Putin said they had arrived at an 'understanding.' Their nearly three-hour meeting in Alaska did not produce a ceasefire, but Trump described it as a 'very good meeting,' while cautioning that 'there's no deal until there is a deal. Read more – Explained: How Nifty, Sensex may react to Trump-Putin talks and Modi's GST tax reform on Monday? 2. GST reform Prime Minister Narendra Modi's Independence Day announcement of major Goods and Services Tax (GST) reforms this Diwali could boost investor sentiment, opine experts. Speaking from the Red Fort on Independence Day, Modi on Friday announced rate cuts to be rolled out by Diwali in the GST 2.0. The PM said GST rates will be lowered on everyday-use goods as part of reforms to the eight-year-old tax regime. 3. US markets The action on Wall Street will give cues to the global markets including India. Wall Street's two major indices finished with declines while the Dow managed to remain afloat in the green. A mixed US economic data led to the souring in sentiments. While the US retail sales climbed 0.5% in July from June, the Federal Reserve's index for industrial production edged down The Dow 30 ended the session at 44,946.10, gaining 34.86 points or 0.08% while S&P 500 settled at 6,449.80, down by 18.74 points or 0.29%. The Nasdaq Composite closed at 21,623, falling by 87.69 points 0.40%. 4. Corporate Action Just about 100 companies have corporate actions lined-up this week with record dates for dividends, rights issue, stock split and bonus shares for more than 100 companies over the five-day trading week. The companies which will have record dates for the purpose of dividend are JK Paper, Jammu & Kashmir Bank, Natco Pharma, Power Grid Corporation of India, Senco Gold, Coal India, Hindustan Aeronautics (HAL), Rail Vikas Nigam (RVNL), Federal Bank, Godfrey Phillips India and Indian Railway Catering and Tourism Corporation (IRCTC). Algoquant Fintech's record date will be for the purpose of stock split, Josts Engineering Company for rights issue and Bemco Hydraulics for bonus issue. 5. IPO watch It will be an IPO heavy week as 5 mainboard issues and one SME issue will hit the Indian primary markets. In the mainboard category, Patel Retail, Vikram Solar, Gem Aromatics, Shreeji Shipping Global and Mangal Electrical Industries will launch their public issues. In the SME segment, Studio LSD will launch its IPO and the stock will get listed on the NSE Emerge platform. Also Read: Vikram Solar, 5 other IPOs to open next week. Here's what GMPs suggest 6. FII / DII Action Market actions will rely on how foreign institutional investors (FIIs) behave. Foreign Institutional Investors (FIIs) sold shares worth Rs 10,173 crore last week. On Friday, FIIs outflows stood at Rs 1,926.8 while the domestic institutional investors were net buyers at Rs 3,896 crore. In 2025 so far, FIIs have sold shares worth Rs 1,16,617 crore. lso Read: FIIs sell Indian equities worth Rs 20,975 crore in August so far. Can Trump-Putin's Ukraine 'understanding' reverse trends? 7. Technical Factors Santosh Meena, Head of Research at Swastika Investmart said that the extreme oversold conditions and supportive global cues lifted investor sentiment though momentum remained muted due to persistent foreign outflows. Broader markets staged a recovery across sectors, led by pharma and auto stocks, though FMCG lagged, he added. From a technical standpoint, the Nifty has established a strong base at the 24,350 level, forming a bullish engulfing candlestick pattern on the weekly chart, Meena said. "The immediate resistance lies at the 20 and 50-day moving averages (DMAs) clustered around 24,700-24,800. A decisive break above this level could trigger a short-covering rally towards 24,950, 25,080, and 25,225. Immediate support is at the 100-DMA of 24,575, with the crucial support level remaining at 24,350," he added. 8. Rupee Vs Dollar The rupee closed at 87.5500 against the U.S. dollar, softer than Wednesday's close of 87.4400, navigating a choppy session that saw it swing between 87.39 and 87.67. The currency unit touched 87.8850 last week after Trump's tariffs salvo, with the Reserve Bank of India stepping in to prevent the rupee from breaching the all-time low of 87.95 - a level bankers believe the central bank will continue to defend. "In the shorter term, we may see some relief on the ratings upgrade, but the rupee is still not out of the woods as trade uncertainties persist and broad economic indicators are still weak," said Dilip Parmar, currency analyst at HDFC Securities. 9. Crude Oil Crude oil prices cooled on Friday in light of the Trump-Putin meeting. Moreover, quoting analysts Reuters reported that premiums for prompt benchmark oil prices globally are falling compared with those in future months on rising output from the Middle East, Latin America and Europe, just as peak summer demand ends. The US WTI oil contracts ended at $63.14, down by $0.82 or 1.28% while Brent oil futures were hovering near $65.85, higher by $0.71 or 1.06%. (Inputs from agencies)
