GST rate cuts likely to take effect by September 20: Report

GST

The proposed changes to GST slabs will likely take effect by the middle of September, Financial Express reported citing a plan which the Centre is working on.

The Union government is working to implement the promised reforms to the tax structure before the upcoming festive season around Navratri, the report cited people familiar with the matter as saying. It added that the rate cuts may take effect latest by September 20.

If the GST Council approves the changes during their upcoming meeting from September 3-4, businesses will be given two weeks to implement the changes to their systems, Financial Express further reported. The GST cuts will coincide with the end of Pitru Paksha (September 7-21) in the Hindu calendar, during which many people avoid buying new clothes, vehicles, jewellery, property and more, the report added.

The GST Council meeting, which was earlier scheduled for mid-September, was preponed after several customers delayed their purchases like cars and other items, waiting for GST reforms, the report further said.

The GST Council, chaired by Finance Minister Nirmala Sitharaman, is slated to meet in New Delhi from September 3-4 to deliberate on the Centre's proposal for a simplified two-rate structure of 5 percent and 18 percent. This comes after Prime Minister Narendra Modi's Independence Day announcement of "next-generation GST reforms" as a Diwali gift. "Everyday items will become very cheap and that will also give a new boost to the economy," he said in his 12th address from the Red Fort.

Last week, the Group of Ministers (GoM) on GST rate rationalisation had approved the Centre's push for a simplified two-slab tax system. Bihar Deputy Chief Minister Samrat Choudhary said on August 21 that the GoM has accepted the proposal to scrap the existing 12 percent and 28 percent tax rates and move towards a dual structure of 5 percent and 18 percent.