From September 22, a tax structure will take effect, cutting four slabs down into two, with a hefty 40% bracket carved out for luxury goods like high-end cars, tobacco, and cigarettes. Most everyday products will see lower taxes meant to spark spending and lift the economy.
Let me tell you that The 56th GST Council meeting, chaired by Finance Minister Nirmala Sitharaman, announced the biggest reform since GST was introduced in 2017.
The four-tier structure of 5%, 12%, 18% and 28% has now been collapsed into two slabs – 5% for essentials and 18% for standard goods. A special 40% rate has been reserved for luxury items and demerit goods such as high-end cars, tobacco, liquor, and online betting.
What’s the Impact on Mobile Phones?
While consumers will benefit from reduced rates on products like soaps, shampoos, televisions, air-conditioners, bicycles, and renewable energy equipment, the Council decided to leave mobile phones at 18% GST. This means smartphones and feature phones will not see any price drop due to the reforms.