'Next Gen GST precursor to eventual single tax slab GST'

Describing the proposed GST tax reforms as ‘Next Gen GST, senior government officials Saturday said that the two-slab tax regime will eventually pave the way for a single sales/services tax rate, hopefully by 2047.

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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 GST”, one 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 condition of anonymity.

They said the new structure would mean that almost all of the common use items will move to the lower tax bracket, leading to price cuts, which in turn would boost consumption.

“Lower taxes means it will put more money in people's pockets. It will obviously lead to more consumption," the official said.