India News : The GST Council meeting began on Wednesday, bringing significant changes to tax rates on footwear and clothing. The council approved easing the GST slabs, benefiting both consumers and businesses. Now, shoes and clothes priced up to ₹2,500 will attract a 5% tax, up from the earlier ₹1,000 limit. Items above ₹2,500 will be taxed at 12%.
In a major overhaul, the 12% and 28% tax slabs have been removed, simplifying the system to just two slabs: 5% and 18%. This move aims to ease compliance and reduce the tax burden on the middle class.
The government also expedited MSME registrations, promising approvals within three days, instead of several weeks. Additionally, changes in the definition of ‘Place of Supply’ were approved to help intermediaries claim Input Tax Credit, making India a more attractive hub for global capacity centers and ITES services.
The meeting will continue on Thursday to finalize rates and address opposition states’ concerns regarding revenue loss, with the central government agreeing to consider compensation. The GST Council also directed CBIC to clarify GST rules on post-sales discounts via a detailed circular.
