A New GST

The indirect tax system has been simplified

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The Goods and Services Tax (GST) Council's 56th meeting on Wednesday introduced substantial changes to the indirect tax structure. The changes are expected to benefit consumers, reduce classification disputes, and enhance compliance. GST has been shifted to a comparatively simple and principally two-rate structure of 5 and 18 per cent. A special demerit rate of 40 per cent has been kept for select goods and services. Although it can be argued that GST is still not close to the ideal single-rate tax structure, the latest changes will address a number of anomalies and structural weaknesses in the system. It has also been decided that the Goods and Services Tax Appellate Tribunal will become operational for accepting appeals before the end of this month. This was a missing link in the GST architecture. The new tax structure will be effective from September 22.