Govt mulls GST simplification with two slabs of 5% and 18%
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The Centre is considering a significant overhaul of the Goods and Services Tax ( GST ) structure, proposing a simplified regime with just two main tax slabs of 5% and 18%, along with a special 40% rate for luxury and sin goods, PTI reported citing sources.As part of the rejig, about 99% of items currently taxed at 12% are likely to be moved to the 5% bracket, the sources told PTI. Similarly, around 90% of taxable goods in the existing 28% slab are expected to shift to the proposed 18% category.(More to come)
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Indian Express
25 minutes ago
- Indian Express
Corporate loan growth slows in April-June quarter as firms delay investments, shift to cheaper debt market
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While state-run Bank of Baroda's corporate loan book expanded by 4.2 per cent Y-o-Y , it registered a sharp dip of 10.2 per cent Q-o-Q. Corporate advances of Union Bank of India and Bank of India rose 2.68 per cent and 4.49 per cent y-o-y, respectively, though their books declined 4.83 per cent and 1.5 per cent sequentially in April-June 2025 quarter. Canara Bank and Punjab National Bank's corporate book grew flat at 0.48 per cent and 1.1 per cent, respectively, on a Q-o-Q basis in June 2025 quarter. Bank of Baroda's chief economist Madan Sabnavis attributes weak credit demand from corporates to the slowdown in investments as companies await a revival in demand. The US President had initially announced to impose a 26 per cent tariff on imports of Indian goods, but later declared a 90-day pause, which resulted in corporates holding back on expansions and new investments. He subsequently doubled the tariff on India to 50 per cent. 'An important factor to consider is the uncertainty in terms of how these tariffs are going to play out and how quickly this is going to be addressed. Due to this uncertainty, a lot of investment decisions could be delayed and people will postpone their spending. This is the second order impact of tariffs,' Setty said during a press conference post the declaration of the Q1 FY26 results. Easing rates in the debt market following the Reserve Bank of India's (RBI) 100 basis points (bps) reduction in the repo rate since February has prompted corporates to shift from banks to debt market instruments. 'Some large corporates are accessing the commercial paper (CP) market to replace working capital limits. This is expected because there is a good amount of liquidity (in the CP market). The rates are much more affordable (in the CP market) compared to borrowing from banks,' Setty said. The lender has seen working capital limit utilisation by corporates in his bank falling to 58 per cent from 62 per cent in Q1 FY25. Total funds raised through CP increased to Rs 4.51 lakh crore in April-June 2025 quarter, compared Rs 3.8 lakh crore in same period of FY25, and Rs 4.38 lakh crore in January-March 2025 quarter, according to Besides CPs, companies are also tapping the corporate debt market for cheaper funds compared to bank loans, which has impacted corporate loan growth of banks. In the first quarter of the current fiscal, corporates mobilised Rs 3.42 lakh crore through private placement of bonds, data from showed. 'We believe that funds raised through the bond market are being largely used by corporates to support ongoing business needs rather than for long-term capital investment,' said Saswata Guha, senior director, Financial Institutions (Banks), Fitch Ratings. 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For large-scale capex-led funding requirements, corporates will have to return to the banks, as the bond market alone will not be adequate to fulfill those needs, Guha said.
Time of India
36 minutes ago
- Time of India
Fresh heritage precinct proposal for KMC
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Hindustan Times
an hour ago
- Hindustan Times
Reforming the GST regime
The Goods and Services Tax (GST), when it was finally implemented after decades of labour, was India's largest ever indirect tax reform. It created a nationally unified market and a unique federal forum for governing it. Doing away with state-level bumps in the indirect tax regime, however, was only one of the GST's promises. It was also expected to make the tax regime simple, especially in terms of slabs. Prime Minister Narendra Modi's Independence Day speech has raised hopes of this promise being fulfilled eight years after GST's roll out. Speaking from the ramparts of Red Fort — the directional changes were later shared by finance ministry officials — Modi said that the Union government has sent a proposal to the Group of Ministers (GoM) constituted by the GST Council to unleash second generation reforms in GST, which, among other things, will bring most items under just two slabs of 'standard' and 'merit' with some exceptions being put under 'special rates'. HT reported earlier that the Centre has been mulling this, but also pointed out how the GST Council has not met for a long time now. While Modi announced that the reforms, especially on the slab front, would likely be rolled out before Diwali (second half of October), a GST Council meeting is yet to be notified. The idea, at least in principle, ought to be welcomed unequivocally. It will simplify the tax regime and take politicking out of setting tax slabs. However, the devil may very well lie in the details. Any large-scale revision in GST slabs will have to take into account its revenue implications as well as a possible inflationary impact. These two are likely to work in opposite directions and are critical factors for the fiscal and political health of the governments in charge, both in the Centre and the states. One would like to believe that a large part of this homework has been done by the GoM and state governments are on the same page with some of these salient findings. We will know more when these proposals are discussed in the next GST Council. A simplified GST is a much-needed step in India's long, even if gradual, road to reforms. Ideally, this reform should have happened earlier and definitely not in the current environment of global economic turmoil. But that's what political friction to reform sometimes entails.
