The Goods and Services Tax (GST) Council has approved steps to reduce compliance hassles for businesses, sources told NDTV.
One key measure cuts registration time for MSMEs and start-ups from 30 days to just three days, making it easier for smaller businesses to start operations. The Council also cleared a proposal for automated GST refunds for exporters.
The Council began its two-day meeting focusing on rationalising GST slabs. Currently, India’s GST system has four tax brackets: 5%, 12%, 18%, and 28%.
Under the proposed changes, around 90% of goods in the 28% category would move to the 18% slab, while a portion of items in the 12% bracket could be lowered to 5%. Officials expect this move to boost middle-class consumption and offset the estimated Rs 50,000 crore revenue loss.
Certain luxury items, including tobacco, high-end cars, and liquor, will continue to attract a “sin goods” tax. The Council has also proposed Health Cess and Green Energy Cess as a replacement for the expiring Compensation Cess.
The GST Council is also considering exempting life and health insurance premiums from GST, which currently attracts 18% tax, potentially easing the cost for policyholders.
Sources told NDTV that the new GST rates could take effect from September 22.