New Delhi: During his 79th Independence Day address, Prime Minister Narendra Modi announced “Next-Generation Reforms” in the Goods and Services Tax (GST) system, describing them as a “Diwali gift” for the nation. These reforms aim to simplify GST slabs, reducing the cost of daily-use items. Significant price reductions are expected for cars, mobile phones, computers, and other household appliances due to changes in tax rates. The central government has proposed simplifying the current four GST slabs of 5%, 12%, 18%, and 28% into two primary rates: 5% and 18%. Additionally, a special 40% rate will be introduced for tobacco, pan masala, and luxury goods. According to the proposal, 90% of items under the 28% slab will be moved to the 18% slab, and 99% of items under the 12% slab will be shifted to the 5% slab.read also: US President Donald Trump Arranges Meeting with Putin and Zelenskyy for Russia-Ukraine Peace Talks

These changes are expected to significantly lower the prices of everyday goods for consumers. Currently, passenger cars and two-wheelers attract a 28% GST plus an additional cess (ranging from 1% to 22%), resulting in an overall tax rate of 29% to 50%. With these reforms, these vehicles are proposed to be moved to the 18% slab, potentially reducing car and bike prices by approximately 10%. However, electric vehicles (EVs) will remain at the 5% GST rate, reflecting the government’s commitment to promoting clean technology. Mobile phones, including smartphones and feature phones, currently fall under the 18% GST slab. With the reforms, some mobile phones may shift to the 5% slab, potentially lowering their prices for consumers. However, sources suggest this change may be limited to specific models. Laptops and computers currently attract an 18% GST.read also: Supreme Court to Hear Questions on President Droupadi Murmu's Bill Approval Powers Today!

If these products are moved to the 5% slab, it could result in significant savings for consumers, particularly benefiting students and professionals. Household appliances such as televisions (larger than 32 inches), refrigerators, air conditioners, and washing machines are currently under the 28% slab. The proposal to shift them to the 18% slab is expected to significantly reduce their prices, making these products more affordable for middle-class families. These GST reforms aim to boost the economy by increasing consumer spending power. Currently, 67% of the government’s GST revenue comes from the 18% slab, 11% from the 28% slab, and 5% from the 12% slab.read also: PM Modi Chairs High-Level Meeting to Discuss Roadmap for Next-Generation Reforms

While simplifying the slabs may impact tax revenue, increased consumer spending is expected to drive economic activity. The proposal has been submitted to the Group of Ministers (GoM) and will be discussed at the GST Council meeting in September or October. If approved by the council, led by Union Finance Minister Nirmala Sitharaman, these reforms could be implemented by Diwali. These GST reforms will reduce the tax burden on the common man while providing significant benefits to MSMEs and small entrepreneurs. Products like cars, mobile phones, computers, and household appliances will become more affordable, enhancing consumers’ purchasing power.JUNEBERRY® Cotton Round Neck Regular Fit Plain Solid Full Sleeve T-Shirt Combo for Women (Pack of 3) (Available Colors: Black, White, Navy, Green,Swanwhite & Cork)