The GST Council is actively working on proposals to simplify the existing Goods and Services Tax structure, which could impact pricing and compliance for many businesses.
Proposed Changes
- Consolidated Slabs: The current multi-tier structure (e.g., 5%, 12%, 18%, 28%) is likely to be merged into two primary slabs: a standard slab (likely around 18%) and a lower slab for essential goods (likely around 5%).
- Abolishing Cess: The compensation cess currently levied on luxury and sin goods might be phased out or integrated into the standard rates.
Impact on Businesses
- Simplified Compliance: Fewer tax slabs lead to easier classification of goods and services.
- Potential Price Adjustments: Businesses should prepare to adjust pricing strategies and update ERP/accounting systems once new rates are officially notified.
Disclaimer: This information is for general guidance only.
Consult your tax advisor for business-specific planning.