GST council on rationalize tax slabs
Team Ambitiousbaba are here with a Current Affairs Special Series. In this series, candidates will be introduced to current affairs topics daily, which will not only improve their general awareness but also will ensure that the candidates do not lack in any current affairs topic. Today’s Current Affairs topic is “GST council on rationalize tax slabs”
The GST Council is expected to look at raising the lowest tax slab to 8 per cent from existing 5 per cent. It will also trim the exemption list in the Goods and Services Tax regime as it seems to increase revenues and do away with states’ dependence on Centre for compensation, sources said on Sunday.
A panel of state finance ministers is likely to present its report by this month end to the Council suggesting various steps to raise revenue, including hiking the lowest slab and rationalizing the slab.
Current GST slabs:
The current GST regime has a four-tier structure in which tax rate of 5, 12, 18 and 28 per cent is levied.
Tax slab of 5%: Essential items which has primary use for daily using have either been exempted or taxed at the lowest slab.
Tax slab of 28%: Luxury and demerit items have been included in the highest slab in which luxury goods attract cess on top of the highest 28 per cent slab. Central government used this cess collection for compensating states for the revenue loss due to GST rollout.
After rationalizing the structure the GoM might be made a 3-tier GST structure, with rates at 8, 18 and 28 per cent and all the goods and services which are currently taxed at 12 per cent, will move to 18 per cent slab.
The GoM might to be proposed raising the 5 per cent slab to 8 per cent which may give an additional Rs 1.50 lakh crore annual revenues. If GST council hike only 1 per cent in the lowest slab it may give around revenue gain of Rs 50,000 crore annually.
Completed its agreed years:
At the time of GST implementation on July 1, 2017, the Centre had guaranteed to compensate states for 5 years till June 2022, and assisting them on their revenue at 14 per cent per annum over the base year revenue of 2015-16.
Goods & Services Tax:
It is an indirect tax which is imposed at every step in the production process and act as a destination-based tax. It was launched on 1st July, 2017 by the president of India.
GST has a comprehensive portal named ‘GSTN’ which is developed by Indian tech giant Infosys Technologies.
Question & Answer:
Q1. How many slabs are currently on GST structure?
Ans. Four (5%,12%,18%,28%)
Q2. On which year Goods and Services Tax was launched?
Ans. In July 2017
Q3. Who chaired the GST council?
Ans. Finance Minister of India has the power to chair the GST council
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