NEW DELHI – Finance Minister Nirmala Sitharaman announced significant revisions to teh Goods and Services Tax (GST) rate structure today, September 21, 2024, streamlining rates into primarily 5% and 18% slabs. The changes,effective September 22,2024,aim to simplify the indirect tax regime and reduce compliance burdens for businesses.
The restructuring consolidates numerous tax brackets, moving towards a more rationalized system. This overhaul impacts a wide range of goods and services, from consumer durables to industrial inputs, and is expected to influence pricing across sectors. The move follows ongoing government efforts to enhance ease of doing business and boost economic activity by reducing complexities within the GST framework.
The Finance Minister indicated that the majority of goods and services will now fall under the 5% and 18% GST rates. Specific items previously taxed at 12% and 28% have been reassigned to these lower brackets. Detailed notifications outlining the revised rates for individual products and services have been issued by the central Board of Indirect Taxes and Customs (CBIC).
These adjustments are anticipated to lower costs for consumers on certain items and provide relief to industries facing high tax incidence. The government expects the simplified structure to improve tax compliance and reduce disputes arising from differing interpretations of the previous, more complex rate schedule. The CBIC will provide ongoing guidance and clarification to ensure a smooth transition for businesses adapting to the new GST rates.