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A leaner GST needs careful execution

The Tribune Editorial: The sharp 40% slab on ‘luxury’ items may look politically palatable, but it could generate disputes unless categories are precisely defined.
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THE Goods and Services Tax (GST), launched in 2017 as India’s most ambitious indirect tax reform, promised to replace a labyrinth of state and central levies with a unified system. However, its complex multi-slab structure often defeated the very goal of simplification. The recent decision of the GST Council to streamline rates into two slabs — 5% and 18% — with a special 40% tax on luxury and sin goods, represents the most sweeping revamp since its rollout. For businesses and consumers, the reform signals hope. Small firms have long complained about compliance burdens under the old four-slab system. A leaner design brings transparency, predictability and easier filing. Consumers, particularly the middle class, stand to gain from reduced rates on essentials and durables, potentially spurring demand at a time when the economy needs a boost.

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