GST 2.0: After the announcement of Goods and Services Tax i.e. GST reform and change in new tax slabs on behalf of the Central Government, it was expressed by the state governments that its revenue will be affected. The Center also admitted that the financial burden on the government may increase after the GST reform. But according to a report, there is no additional financial impact on any kind of government with GST reform.

Government will not be burdened

According to rating agency Crisil, the changes made in the recent GST rates will not cause any fiscal burden on the government. On Friday, the rating agency said in a report that due to the reduction in GST rate by the government, a net loss of about Rs 48,000 crore is estimated to be around Rs 48,000 crore, while in the financial year 2024-25 the total GST collection had increased to Rs 10.6 lakh crore.

This report further stated that this revenue loss is not very high in proportion to the total GST collection. It is worth noting that the GST Council has recently changed the tax structure and decided to keep it in two slabs of 5 percent and 18 percent. This amendment of GST reform will become effective from September 22 and after that the prices of many products and services will decrease.

Strong tax collection

According to the Crisil report, rationalizing GST rates will be able to bring more Goods and Services under the formal tax realm, which will strengthen tax collection in the medium period. Earlier 70-75% GST revenue used to come from 18% slab, while 12% slab used to get only 5-6% and 13-15% revenue from 28% slab. According to the report, there will be no significant loss to revenue due to reduced tax on goods included in 12% slab.

At the same time, rates on fast growing services like mobile fee are the same. Whereas new services like e-commerce delivery have been incorporated into the GST slab and taxed at the rate of 18%. Crisil said that tax cuts will increase the actual income of consumers, which can encourage both demand and GST collection. However, it will depend on to what extent producers deliver the benefit of change in tax to consumers.

Before Diwali, the government has announced a change in GST rates, giving great relief. The new rates will be implemented from September 22 and people will have to pay low prices from soap-shampoo to milk curd and AC-TV to cars. Next week Apple is going to launch its iPhone 17 series. In such a situation, some people may feel that they will not have to put much emphasis on their pockets to buy a new iPhone. Let us know if this is really going to happen.

IPhone prices will not be affected

The official prices of Apple iPhone 17 Series have not been announced yet. According to some reports, the initial price of this series in India can be Rs 84,499. Changes in GST rates will not affect these prices. The reason for this is that smartphones are in the 18 percent tax slab. Earlier, 18 percent GST used to be levied on them and still have to pay the same tax. There has been no change in the GST on the smartphone. In such a situation, customers will have to pay the same tax as earlier for the iPhone as well as all the smartphones. Because of this, mobile prices have not been cut like smart TV and AC.

Demand was made from the government

The India Cellular and Electronics Association (Icea) had demanded the government to bring the smartphone into a 5 percent slab. He said that the phones have now become a need and Digital India has an important tool. Before the arrival of GST, most of the states used to keep mobile phones in the category of essential goods. At present, the government has not accepted this demand. Let us know that at the beginning of GST, there was a 12 percent tax on the smartphone, which was increased to 18 percent in 2020.

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Big relief before Diwali, Smart TV and AC will be cheap, government changes GST rates

The government has made huge changes in the rates of GST. Due to this, the price ranging from household use to electronics items is going to be a huge decrease. The new rates will be applicable from September 22 and people will be able to take advantage of the low prices while shopping for Diwali. This decision has reduced the prices of smart TV, AC and dishwasher etc. There is also a question in the minds of many people that now the smartphones of other companies including Apple and Samsung will be cheap? Let’s know the answer to this question.

Will smartphone prices decrease?

People looking for smartphones being cheap will be some timely disappointment. The latest decision of the government has not affected the prices of mobile phones. Earlier, 18 percent GST used to be on the smartphone and it will still continue. Due to this, the prices of smartphones will not be reduced at the moment. However, it was already being speculated that customers are not going to get any relief on smartphone prices.

Why didn’t the smartphones become cheap?

According to media reports, sources associated with the industry already expected that the price of the smartphone would not be reduced. He says that if there was any discussion about 12 percent slab, there would have been a little hope, but now the bottom slab is 5 percent from 18 percent. In such a situation, it was difficult to bring the smartphone into this slab. However, the India Cellular and Electronics Association had demanded the government to keep the smartphone in a 5 percent slab. He said that the phones have now become a need and Digital India has an important tool. Before the arrival of GST, most of the states used to keep mobile phones in the category of essential goods. Let us know that at the beginning of GST, there was a 12 percent tax on the smartphone, which was increased to 18 percent in 2020.

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Big relief before Diwali, Smart TV and AC will be cheap, government changes GST rates

GST couricil meeting: The two -day meeting of the GST Council is going to be held from Wednesday. The country and the world have a special eye on this meeting being held ahead of time. Because after the announcement of PM Modi of GST Reform, steps will be taken in that direction. In this, ambitious changes in Goods and Services Tax (GST) may be considered to reduce tax on daily use items.

The GST reform will be taken during the meeting of this GST Council under the chairmanship of Union Finance Minister Nirmala Sitharaman. In the proposed reforms, the current 12% and 28% tax slabs are prominent to keep two tax rates of only 5% and 18%. Apart from this, a special rate of 40% will be done on a few selected items.

Why GST Council is important

The tax slab cut and the decrease in prices due to this has been commonly welcomed. But the states ruled by opposition parties are demanding compensation for the loss in revenue due to this change.

Prime Minister Narendra Modi in the Independence Day speech on 15 August told about the plan of GST reforms. Soon after, the Central Government shared a blueprint for the proposed improvement with a group of ministers (GOM) of various states for initial review.

GOM has agreed to the proposal of the center to reduce tax rates. The council will consider these recommendations on 3-4 September.

The news agency PTI quoted sources as saying that the Group of Ministers has supported the imposition of 18% GST on an electric vehicle priced up to Rs 40 lakh, while agreeing hard to the changes in the slabs. However, the central government wants to encourage electric vehicles and is supporting 5% rate for them.

What can be big changes

• Ghee, dry fruits, 20 liters of drinking water, salty, some shoes and costumes, medicines and medical equipment are likely to be reduced from 12% to 5% tax slab.

• Objects like pencils, bicycles, umbrellas and hair pin can also be brought into 5% slab.

• Taxes on electronic goods like TV, washing machine and refrigerator can be reduced from 28% to 18%.

• At present, the highest rate and compensation cess of 28% is applicable to vehicles. 18% rate will be applicable to early level cars. At the same time, a special rate of 40% will be applicable on SUVs and luxury cars.

• A special rate of 40% will also be applicable to the objects like tobacco, paan masala and cigarettes. Additional tax can also be levied on this category on this category.

Opposition states like West Bengal have demanded that any tax imposed above the rate of 40% be shared with the states. So that their revenue deficit can be compensated. Eight states ruled by opposition parties include Himachal Pradesh, Jharkhand, Karnataka, Kerala, Punjab, Tamil Nadu, Telangana and West Bengal.