Latest news with #DiwaliBonanza
India Today
2 days ago
- Business
- India Today
GST bonanza before festive rush? Here's what it could mean for you
India's common man may soon see a change in how much they spend on everyday needs if the government's proposed changes to the Goods and Services Tax (GST) are put into plan, often referred to as GST 2.0, is aimed at making the tax system simpler and reducing the overall burden on consumers. For families preparing for the festive season, this could mean lower bills on food, clothes, medicines, and even household Finance Ministry has been working on this plan for 195 days, starting right after the Budget was announced on February 1, 2025, sources told Minister Narendra Modi first hinted at the move during his Red Fort address, calling it a 'Diwali Bonanza.' Officials say the new GST structure is designed to be leaner and cleaner, reducing tax rates across categories and making the system easier to ESSENTIALS TO GET CHEAPER Under the proposed changes, everyday essentials like food, clothes, and biscuits would fall under the 5% GST slab. Nearly 99% of items that currently attract 12% tax would be moved to 5%.Explaining this shift, Karthik Mani, Partner, Indirect Tax at BDO India, said the cuts would also apply to medicines, processed foods, non-alcoholic drinks, and pointed out that many of these are high-spend categories during the festive season. 'Consumers of these items would be largely benefitted,' he TAX ON HOUSEHOLD APPLIANCESThe biggest change for middle-class families could be in aspirational goods such as televisions, refrigerators, and washing machines. At present, these items are taxed at 28%. With the new rules, 90% of goods in the 28% slab would shift to 18%.'This means that household budgets could become lighter as items like processed foods, medicines, and even white goods may now move from 12% or 28% to lower GST slabs,' Mani THAT STAND TO GAINThe benefits are not limited to households. Several industries could also see a positive impact.'FMCG, especially processed agricultural products, textiles, pharmaceuticals, automotive, white goods, and even insurance are likely to see price drops because of the proposed rate cuts,' Mani also mentioned that the cuts are not temporary. 'The rate reductions would provide a lasting benefit without any end date, as the rates are meant to be revised permanently and not just for the festive season.'RELIEF FOR SMALL SHOPKEEPERSThe changes are expected to help not just big companies but also local retailers. According to Mani, 'The rate cuts will be beneficial to each player in the supply chain, including shopkeepers and retailers. Lower taxes will reduce their need for working capital and improve their ability to invest.'advertisementHowever, he also said that the full benefit will depend on how the government handles the issue of the 'inverted duty' structure in some sectors. He said it would also rely on whether manufacturers and dealers pass on the benefit of the rate cut to the final customer. If implemented, GST 2.0 could bring meaningful savings to households. For daily essentials, medicines, festive shopping, and even big-ticket appliances, the proposed cuts promise lower as Mani cautions, the real difference for consumers will be seen only if companies and retailers pass on the reduced tax rates fully to buyers. Until then, the common man will be waiting to see whether this festive season really brings relief to their pocket.- Ends
India Today
4 days ago
- Business
- India Today
Real wallet-friendly shake-up: GST 2.0 to feel like ‘Good and Simple Tax'
The government is all set to roll out GST 2.0 with a major rate rationalisation, aimed at simplifying taxation and reducing the burden on consumers. After 195 days of work behind the scenes, the Finance Ministry is ready with a leaner and cleaner GST structure that promises lower prices across Minister Narendra Modi dropped the first hint during his Red Fort address, calling it a 'Diwali Bonanza.' Sources revealed that the Finance Ministry began working on the rationalisation plan the very day the Budget was announced, on February 1, WILL CHANGE FOR CONSUMEREveryday essentials such as food, clothes, and biscuits will now attract just 5 percent GST. In fact, 99 percent of items in the 12 percent slab are shifting to 5 percent, while 90 percent of goods under the 28 percent slab will move to 18 means household appliances like refrigerators, televisions, and other aspirational goods will now be taxed at 18 percent instead of 28 percent, directly boosting savings for middle-class EVERYTHING TO GET CHEAPOn the flip side, tobacco and masala products will face the maximum legal cap of 40 percent GST. Officials underline that the law does not allow the rate to exceed 40 percent under any SIMPLER SYSTEMThe revamp focusses on rationalising slabs, widening the tax net, and fixing inefficiencies. By lowering rates, widening coverage, and cutting complications, GST 2.0 is designed to live up to its original the rollout goes as planned, this overhaul may make GST feel like: 'Good and Simple Tax'.- Ends advertisement
