The 56th meeting of the GST Council has approved a two-level (5% and 18%) tax structure, removing the old four-level tax system (5%, 12%, 18%, 28%). Apart from this, a special tax rate of 40% has been implemented on some luxury goods and services.
The industry had high expectations regarding mobile phones in the meeting, but the GST Council did not reduce the tax rate on smartphones.
Sin Goods are products that are considered harmful to health or society, so they are taxed more so that their use is reduced. This additional tax is used for public health and welfare.
Most cars would fall into the 18% tax slab under this new arrangement. Consequently vehicles that currently pay 28% GST would only pay 18%.
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