In a meeting of a group of ministers on GST held on Wednesday and Thursday, an agreement was made on the Central Government’s proposal to remove two GST slabs. After this change, the highest GST slab will remain at 18%.

Prime Minister Narendra Modi, in his speech from the Red Fort on August 15, said that people of the country will get a big gift this Diwali.

PM Modi said, “In the last eight years, we have made big improvements in GST. We have reduced the tax burden in the country and made the system simple. Now, after eight years, the time has come to review it. We started the review by forming a high-level committee and also discussed it with the states.” PM Modi also promised double relief in Diwali and assured huge tax benefits. After this, experts are guessing in which sectors people may get major tax relief.

Relief on Many Things in GST

After Thursday’s meeting, Bihar Finance Minister Samrat Chaudhary said, “The Central Government has given a proposal to remove the 12% and 28% slabs. We have supported this proposal. Now the GST Council will decide.”

If GST on health and life insurance is removed, people will get big relief. Punjab Finance Minister Harpal Singh Cheema said, “Since 2017, GST has been changed 27 times and the rate reduced 15 times.” He also said that the Centre has still not given Punjab the pending ₹50,000 crores.

If the GST Council accepts the proposal, the highest slab will be 18%. This means things taxed at 28% will now come down to 18%. Prices of motorcycles, bicycles, some tractors, air conditioners, fans, electric pumps and other items will reduce.

If the 12% slab is removed, goods like butter, ghee, condensed milk, cheese spread, dates, jam, nuts, diabetic foods, oxygen for treatment and many more items will also become cheaper.

What is GST?

GST (Goods and Services Tax) started in 2017. It was called “one nation one tax.” Earlier, many taxes were merged into GST. Right now, GST has four slabs – 5%, 12%, 18% and 28%.

  1. 5% slab: items like tea, coffee, sugar, oil, fertilizers.
  2. 12% slab: items like fruit juice, computers, Ayurvedic medicines, sewing machines.
  3. 18% slab: most services like telecom, insurance, IT, restaurants.
  4. 28% slab: luxury goods like ACs, fridges, tobacco, expensive hotels.
  5. Some special rates are also there – 3% on gold, 1% on small items, 5% on some restaurants.