GST Council Approves Two-Tier Tax Structure: Implementation from September 22
The Goods and Services Tax (GST) Council, in its 56th meeting held on Wednesday (September 3), approved a two-tier rate structure of 5% and 18%, which will be implemented from September 22. This decision, which was a consensus-based move, aims to rationalize tax rates and reduce complexity in the tax system.
Bihar Deputy Chief Minister Samrat Choudhary announced that all states were on board for the rate rationalization. The marathon meeting lasted for 10.5 hours, during which the Centre and states discussed and thrashed out key tax proposals.
West Bengal Finance Minister Chandrima Bhattacharya stated that the total loss due to the GST rate rationalization would be ₹47,700 crore. This figure highlights the significant financial implications of the decision, but it is also expected to bring more transparency and efficiency to the tax system.
Uttar Pradesh Finance Minister Suresh Khanna mentioned that no decision has been taken on the tax incidence on demerit goods. The imposition of a levy over and above the 40% would be decided later, indicating that the Council is taking a cautious approach to ensure that the changes are well-received and effective.
The two-tier tax structure is expected to benefit the real estate sector significantly. Rationalizing rates to 5% and 18% will reduce the complexity of the tax system, making it easier for developers and consumers to navigate. This move is also expected to boost the economy by encouraging more investment and development in the sector.
The implementation of the two-tier tax structure is a step towards simplifying the GST regime, which has been a point of discussion and debate since its inception. The Council's decision to move forward with this structure demonstrates a commitment to addressing the concerns of various stakeholders and improving the overall tax environment in the country.
In summary, the GST Council's approval of the two-tier tax structure is a significant step towards a more streamlined and transparent tax system. The implementation from September 22 is expected to bring positive changes to the real estate sector and the economy as a whole.
