Centre to extend relief to middle-lower class families in form of reduction in GST

NEW DELHI: The Centre is now planning to extend relief to the common man and the low-income earners of the country. Reports said the central government is seriously considering a move to reduce the prices of everyday goods for the common man in the form of a reduction in Goods and Services Tax (GST). The report said the 12 percent GST slab may be completely eliminated or reclassify many items currently taxed at 12 % into the lower 5% bracket.

Most of the items presently charged at 12 percent GST are everyday goods for the common man. With the reduction in the prices, the cost of living of such people will decrease significantly. It is learned that the final decision may be taken in the 56th meeting of the GST Council, which will be held soon.

The GST Council, which is headed by the Union Finance Minister and includes state finance ministers, has the authority to recommend changes in tax rates. If implemented, this proposal will be one of the most significant revisions in GST rates since the introduction of the indirect tax regime in 2017.

Reduction in items
Toothpaste, tooth powder, sewing machines, iron boxes, small-capacity washing machines, bicycles, ready-made garments, sanitary napkins, hair oils, toothpaste, umbrellas, water filters and purifiers (non-electric types), pressure cookers, cooking utensils made of aluminum and steel, low-capacity vacuum cleaners, some vaccines, packaged dairy products, etc.

Reducing the GST slab will have a huge political impact on the Centre, especially with assembly elections looming in states like Kerala, Tamil Nadu, Tripura and West Bengal. Recently, there was a significant reduction in interest rates, which has resulted in a significant reduction in EMIs on bank loans.