If you like branded clothes, soon your shopping bill may go down. Food items can also become cheaper. In the GST Council meeting next month, led by Union Finance Minister Nirmala Sitharaman, there may be a decision to reduce GST rates. These items can be moved to the 5% GST slab. According to The Times of India, sources said that the government wants to make the tax system simple. For this, a proposal to cut GST on clothes and food items is on the agenda.
Prices of Many Things May Fall
The GST Council will meet on 3 and 4 September. The Union Finance Minister and all state governments will be part of it. After GST reform, only two slabs may remain — 5% and 18%. A 40% GST rate will be kept for harmful or luxury items.
According to TOI, some states like West Bengal suggested raising the maximum GST to 40%. But experts say such a move could send a wrong message. For this, major changes will also be needed in the law.
GST Rates on Different Items
- GST on cement may come down from 28% to 18%.
- GST on salons and parlors may fall from 18% to 5%.
- Items like AC, TV, and refrigerators may be kept in the 18% slab.
- GST on health insurance may come down from 18% to 0%.
After these reforms, states are worried about losing revenue. In the GST Council meeting, a plan may be made on how the Centre will compensate the states for this loss.