GST Council Meets: Anticipation Builds for Diwali Reform Push in Economy

Swift Summary:

• The GST Council, chaired by Finance minister Nirmala Sitharaman, is deliberating reforms proposed by the Centre, including condensing the four-tax slab system to two: 5% and 18%. A special 40% rate for luxury and demerit goods has been suggested.
• Under the reform plan,most items in the current 12% slab will shift to 5%,while about 90% of items taxed at 28% will move to the new lower slab of 18%.
• Everyday products like ghee,medicines,packaged water,pencils,bicycles,and household electronics such as TVs and refrigerators could see reduced taxation.
• Luxury cars and demerit goods like tobacco would attract a higher rate of up to 40%.
• The centre is pushing for a lower GST rate (5%) on electric vehicles (EVs) but faces resistance from some states advocating an upper cap of rs.40 lakh at an effective tax price.

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