The central government has made a decision that provides relief to consumers. The ministerial group has approved the proposal to change the structure of four tax slabs (5%, 12%, 18%, and 28%) to now bring it into 2 stages. This will make many daily use items cheaper.
While providing information, Bihar's Deputy Chief Minister Samrat Choudhary stated that the 12% and 28% tax slabs will be abolished and instead only 5% and 18% rates will be maintained. However, there is also a proposal to impose a 40% tax on luxury and 'harmful' items.
Meanwhile, opposition-ruled states have demanded that the central government take a clear stance to compensate for the revenue loss. West Bengal's Finance Minister Chandrima Bhattacharya has stated that this new system could impact the states' income.
From the consumer's perspective, many items are now likely to fall under the 5% slab. This includes dry fruits, toothpaste, soap, hair oil, common medicines, processed foods, clothing, shoes, bicycles, kitchen utensils, agricultural machinery, and solar water heaters. On the other hand, expensive items like cement, cosmetics, chocolates, TVs, ACs, refrigerators, tires, and plastic goods will now fall under the 18% tax slab. A final decision is expected in September-October.