In a major step towards economic reforms, Prime Minister Narendra Modi has restructured the GST rates by lowering tax on almost all essential goods and services, while reducing the tax slabs from four to two. Two slabs – 12 per cent and 28 per cent – have been abolished. There will be only two major slabs now – 5 per cent and 18 per cent.
Paan Masala, cigarettes and tobacco, along with other costly, luxurious goods like cars and carbonated water products, will face a sin tax of 40 per cent.
All daily food items, home appliances, cars, bikes, life-saving drugs, tractors and agricultural appliances are now in the lower tax slab. GST on individual health insurance and life insurance has been abolished. People will now have to pay less premium on life and medical insurance.
The holy festival of Navratra begins on September 22. From this date, the new GST rates will be implemented. Prime Minister Narendra Modi has described this as a Diwali bonanza for the common man. GST now means Good and Simple Tax, he said.
Modi pointed out how, during the Congress rule, people used to be burdened under the weight of steep taxes. He hoped that the lifestyle of people would now improve, and it would give a big boost to the economy.
None of the political parties have criticised the new GST slabs. However, Congress has tried to claim credit for this. One needs to make a comparison on how goods used to be taxed during Congress rule and how goods will now be taxed under the new slabs during Modi’s rule.
Let me give some examples, there was 27 per cent tax on soap, toothpaste and hair oil during the Congress rule, and it will now be only 5 per cent. Tax on sewing machines was 16 per cent during the Congress rule, and it is now 5 per cent. There was 29 per cent tax on cement during the Congress rule, and now it will be 18 per cent. Bottled water used to be taxed at 18 per cent during Congress rule and now it will be 5 per cent.
There are many such comparisons. The question is not about cheaper commodities only. The changes made by Prime Minister Modi in GST are not only part of tax reforms, but will benefit every class of consumers. Commodities of daily use will now become cheaper and the quality of life will improve. Small traders will benefit from a rise in sales, and it will have a good effect on the manufacturing sector, which will provide jobs to more people.
The GST reforms will have a good impact on the overall growth of the Indian economy. The procedure for depositing GST and obtaining a refund has now become easier. For traders and businessmen, this will be a boon.
On the whole, Next Gen GST reforms will have a direct impact on economic growth. No need to say that Narendra Modi will be reaping the political benefits.
Aaj Ki Baat: Monday to Friday, 9:00 pm
India's Number One and most followed Super Prime Time News Show 'Aaj Ki Baat- Rajat Sharma Ke Saath' was launched just before the 2014 General Elections. Since its inception, the show has redefined India's super-prime time and is numerically far ahead of its contemporaries. Aaj Ki Baat: Monday to Friday, 9:00 pm
