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The central government is going to make a big change in GST (Goods and Services Tax). The government has made a new plan called GST 2.0, which will soon be placed in the meeting of the Finance Ministers of the states. After this change, the existing four tax slabs, 5%, 12%, 18% and 28%, will be reduced to just two slabs, 5% and 18%. Meaning, the things that were earlier taxed at 5% or 12% will now come in the 5% slab. At the same time, those who were taxed at 28% will now come in the 18% slab. This change will benefit the common people because the goods will be cheaper and their purchases will increase. This will also speed up the market and strengthen the economy. State-run bank SBI has also said in a report that this change can increase the total consumption in the country by about Rs 1.98 lakh crore.

What is mentioned in the report?

The latest report of SBI Research states that these changes can put the government in a revenue deficit of about Rs 85,000 crore. But despite this loss, the country's consumption, i.e., shopping, is going to get a boost of about Rs 1.98 lakh crore. This means that the demand in the market will increase, and this will strengthen the country's economy.

According to the report, the GST rate on everyday essential items like food items and clothes is likely to be reduced from 12 percent to 5 percent. This can reduce the Consumer Price Index (CPI) based inflation rate by 0.2 to 0.5 percent. This simply means that your everyday items will be cheaper, and inflation will be felt less in the market. Especially the common man will benefit the most from the fall in the prices of food items.

This is why the GST rule is being changed.

Till now, four tax slabs, 5%, 12%, 18% and 28% are applicable in GST, which are levied on different things and services. This has made the tax system a bit complicated, and it becomes difficult for people to understand it. The government aims to make tax rates easy and simple to understand, so that tax collection is better and people shop more. According to the SBI report, after these reforms, the average rate of GST can come down to about 9.5%, whereas it is about 11.6% right now.

The economy will benefit.

Due to this change, the government may have to bear a loss of about Rs 45 thousand crore this year itself. But due to tax cuts and relief in income tax, the total consumption of the country can increase to Rs 5.31 lakh crore. This is about 1.6 percent of India's total GDP. It is clear that even though the government will suffer a little loss, it will bring new life to the economy and strengthen the market.

40% tax on harmful goods
The government has also paid special attention to harmful goods like pan masala and tobacco. Under GST 2.0, there is a plan to increase the tax rate on these things to about 40 percent. Its purpose is not only to increase revenue, but also to reduce the consumption of these harmful products. The government says that this heavy tax is being imposed so that its use can be controlled and the government can also get additional revenue. This step is also considered important from the point of view of public health.

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