Attention Indian Consumers!!. A major GST Relief may be announced on December 17 (Maybe 22nd December) following the GST Council’s Meeting. Reportedly, the most goods (except demerit goods, cement, and automobiles) part of the 28% GST Rate slab could be brought under the 18% Tax slab. Electronic goods stand to gain the most from this decision. Consumer spending is pegged to get a major boost following the decrease in 28 % GST rate.
If the proposal is accepted by the Council on December 17 (Maybe 22nd December) than 18% Tax Slab could well be the highest GST Tax slab except for only three categories of items.
The Impact GST Rate Slash
While consumer spending may increase post the move which may also increase job growth in the formal sector, the biggest loss would be to the Government’s Tax Revenue. Reportedly, the current GST accrues are also below budgetary targets.
Some Goods May be transferred from the 18% tax bracket to 5% tax bracket. There are only 35 items in the 28% Tax Slab.
Read Also: Common Suggestions For GST Council’s Next 31st Meeting
The last time such a rate slash was done, the Government had incurred a total loss of nearly Rs 10,000 crore-Rs 11,000 crores in Annual Tax Revenue. Reportedly, the Government had earlier set a target of collecting 1 Lakh Crore average monthly Tax revenue.
For April-November 2018, the tax revenue has been Rs 7.76 lakh crore. Tax revenue less than the desired Rs 12 lakh crore mark for the financial year 2018-19 would impede indirect tax mop-up and subsequently affect fiscal deficit.
