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GST 2.0: GoM has approved the proposal to eliminate 12% and 28% slabs and keep both the slabs of 5% and 18% under GST reforms. Now the GST Council will take the final decision.

GST 2.0:  Under GST reforms, the GoM on Thursday accepted the proposal to eliminate the 12 percent and 28 percent slabs and keep both the slabs of 5 percent and 18 percent. Siddharth Khemka, Research Head of Wealth Management at Motilal Oswal Financial Services Ltd, says, this is the first big step towards implementing the next generation GST reforms announced by Prime Minister Narendra Modi on the occasion of Independence Day. Now the final decision on this will be taken by the GST Council in the meeting to be held in September. 

The price of many essential items will decrease

After the approval of GoM, the 28 percent slab will be merged into 18 percent and the 12 percent slab will be merged into 5 percent slab. Due to reduction in GST, the price of essential commodities will decrease and many other things will also become cheaper. Here is a list of all those things which can become cheaper and costlier after the implementation of revised GST rates. 

Essentials

From medicines to processed food, non-alcoholic beverages and some dairy products, GST is currently levied at the rate of 12 percent. All these things can become cheaper with GST reforms. Hotel rooms and some construction materials also currently fall in the 12 percent slab. 

Air-conditioner, refrigerator

If you want to buy a new fridge or AC, then their rates are also going to decrease because currently 28% GST is levied on them. However, with the amendment, it will become 18%. 

4 Wheelers

Four-wheelers with engine capacity less than 1,200 cc and two-wheelers up to 500 cc may also get cheaper as all these currently fall under the 28 per cent GST slab. 

New GST Slab

A new slab of 40% has been proposed under the GST reform. This includes sin and luxury products like expensive cars, alcohol, gambling, soft drinks, drugs, fast food, coffee, sugar and tobacco. These things may become expensive because currently 28% GST is levied on them. 

Let us tell you that sin tax is a kind of special tax, which the government imposes on those things which have the potential of causing loss. Due to the tax, things will become expensive, their demand will decrease and consumption will decrease, which will also reduce losses. GoM has also reviewed the Center's proposal to keep health and life insurance premiums out of the scope of GST.  

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