GST Council Approves Two-Tier Tax Structure: Implementation from September 22
The GST Council has approved a two-tier tax structure of 5% and 18%, set to be implemented from September 22. This move aims to simplify tax rates and bring more transparency to the real estate sector, benefiting both developers and consumers.
GstTax StructureReal EstateRate RationalizationEconomyReal EstateSep 03, 2025
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.
Frequently Asked Questions
What is the new two-tier tax structure approved by the GST Council?
The new two-tier tax structure approved by the GST Council consists of two rates: 5% and 18%. This structure will be implemented from September 22.
When will the new tax structure be implemented?
The new two-tier tax structure will be implemented from September 22.
Who approved the new tax structure?
The Goods and Services Tax (GST) Council approved the new two-tier tax structure in its 56th meeting held on September 3.
What are the expected benefits of the new tax structure?
The new tax structure is expected to simplify the tax system, reduce complexity, and bring more transparency, especially benefiting the real estate sector.
What is the total estimated financial loss due to the GST rate rationalization?
The total estimated financial loss due to the GST rate rationalization is ₹47,700 crore, as stated by West Bengal Finance Minister Chandrima Bhattacharya.
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