A two-day meeting of the Group of Ministers (GoM) on Goods and Services Tax (GST) reforms is set to begin in New Delhi.
Union Finance Minister Nirmala Sitharaman will speak to the panel at 2 p.m. as part of the discussions.
Centre Proposes Simpler Two-Slab GST System
This meeting marks the Centre’s official move to push for a major reform in the GST system. The government has proposed a simplified two-slab structure with tax rates of 5% and 18%.
In addition, a special 40% rate is being considered for certain demerit goods like pan masala, tobacco, and online gaming.
Key Issues on the Agenda
The GoM, led by Bihar Deputy Chief Minister Samrat Choudhary, will review important issues such as:
GST on health and life insurance premiums – The Centre has suggested cutting the current 18% tax to 5%, or even removing it completely.
The future of the compensation cess, which is nearing the end of its collection period.
Final Decisions Will Go to GST Council
After reviewing the proposals, the GoM will submit its recommendations to the GST Council, chaired by FM Nirmala Sitharaman.
A separate GoM focusing on the compensation cess is being led by Minister of State for Finance Pankaj Chaudhary.
GST 2.0: A Move Toward Simplification
These changes, referred to as GST 2.0, are part of the government’s effort to make the tax system simpler and more efficient.
Prime Minister Narendra Modi had hinted at such reforms during his Independence Day speech, calling them a potential Diwali gift for the people.
