Next-Gen GST step towards a single tax slab GSTGSTDated:- 17-8-2025PTINew Delhi, Aug 17 (PTI) The proposed ‘Next Gen GST’ with sweeping reforms, lower tax rates, and just two slabs, aims to boost the economy amid tariff threats and set the stage for a sin
Next-Gen GST step towards a single tax slab GST
GST
Dated:- 17-8-2025
PTI
New Delhi, Aug 17 (PTI) The proposed ‘Next Gen GST’ with sweeping reforms, lower tax rates, and just two slabs, aims to boost the economy amid tariff threats and set the stage for a single tax rate regime by the time India becomes a developed nation, government sources said.
They said the proposed new GST regime, which slashes tax rates and assigns just two slabs of 5 per cent and 18 per cent, will boost the economy and also serve to mitigate tariff threats.
The proposed two-slab regime, if approved by the GST Council, will replace the current four slabs in the Goods and Services Tax (GST) regime, doing away with the 12 per cent and 28 per cent slabs.
Calling it the “next Gen GSTÂ’, a government official said, “It is a game changer reform. In the pantheon of economic reforms seen in India, it's right up there”. The officials spoke on the condition of anonymity.
Government sources said the new struc
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n the system.
Once the CentreÂ’s proposal is accepted by the Group of Ministers (GoM) and is approved by the GST Council, it will end the flux of tax rates and ensure stability, the officials said.
“What we have suggested is a 'Next Gen GST' keeping the needs of the middle class, poor, farmers, and MSMEs in mind. Also, it has been ensured that tax on daily use items is low,” the official told PTI.
“Once the system is put in place and India becomes a developed nation, we can think about a single rate GST,” the official said, adding that a single rate structure is suitable for developed countries where income and spending capacities are uniform.
“The ultimate aim is to move to a single slab structure,” the official said, adding that the time, however, is not right at present.
According to the official, during the process of overhaul, every due process is being followed. The Centre has taken the steering role but is protecting constitutional obligations by sharing it with the Group of
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40 billion of non-exempt Indian exports such as gems and jewellery, textiles and footwear.
Prime Minister Narendra Modi, in his Independence Day address to the nation on Friday, emphasised that India should become self-reliant and consume what is made in India.
The tax slabs that the Union Finance Ministry has proposed will go to a group of ministers from different states, and after their concurrence, will be placed before the all-powerful GST Council, which is headed by the Union Finance Minister and comprises representatives of all states and UTs.
The council is expected to meet next month to deliberate on the tax reform proposal.
About 20 per cent of items, including packaged food and beverages, apparel and hotel accommodation, are currently taxed at 12 per cent GST and account for 5-10 per cent of consumption and 5-6 per cent GST revenue.
Moving them to a lower 5 per cent slab may lead to loss of revenue, but the Central government is hopeful that a boost in consumption would
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