Simplified Tax

The revamped GST system that kicks in on September 22 will hopefully boost demand and consumption

- SHUTAPA PAUL

The GST reforms were a long time coming. A really long time. Nevertheless, better late than never, eh? A timely boost to a sluggish economy, dried up consumption patterns, and apprehensive spending. The US tariffs came as a double whammy, inciting further worry and trepidation in the market. Rationalising the GST rates and bringing most items under 5 per cent and 18 per cent is a welcome move.

GST 2.0 will provide a fillip to several sectors such as real estate, automobiles, fast-moving consumer goods (FMCG), tourism and hospitality, agriculture, renewable energy, textile and apparel, and consumer durables. The biggest winner is the common citizen, who has been burdened and aggrieved by high inflation and lower earnings. The new structure, including GST-free life and health insurance, leaves more money in the hands of the people, hopefully prompting increased consumption, while also providing a boost to the credit sector. Luxury and "sin" goods now fall under a new 40 per cent GST tax slab. A concession for professionals and consultants within the services industry would have been beneficial, but that segment has once again been entirely ignored.