The Union Finance Ministry has notified Central GST (CGST) tax rates for goods, which will be effective from September 22.
Under the Goods and Services Tax (GST) system, the revenues are shared equally between the Centre and the states.
States will now have to follow suit and notify the State GST (SGST) rates to be levied on goods and services beginning Monday.
As per the new GST structure announced by the GST Council on September 3, there will be a two-tier tax slab system wherein the majority of goods and services will attract tax of 5 and 18 per cent. A 40 per cent tax will be levied on ultra-luxury items, while tobacco and related products will continue to be in the 28 per cent plus cess category.
With the reduction in rates on most goods, the onus is now on the trade and industry sector to pass on the benefit of these tax rate changes to consumers and align compliance in a timely manner.
Also Read: GST reforms will lead to more cash in hand: FM
AMRG & Associates Senior Partner Rajat Mohan said by issuing clear schedules in the notification, the government has provided much-needed clarity on applicable rates across a wide spectrum of goods.
"With this clarity in place, the ball is now in the industry's court. Businesses must promptly update their systems, revise pricing, and ensure smooth implementation of the new rates across supply chains," Mohan said.
The success of this reform will depend on how effectively and transparently the industry adopts these revised tax rates, he added.
EY Tax Partner Saurabh Agarwal said that as rate notifications are now being released, it is imperative for industries to align their ERP systems, pricing decisions and supply chain.
"This strategic alignment is critical to ensure a smooth implementation and, crucially, to guarantee that the benefits of this rate rationalisation are effectively passed on to the end consumer," Agarwal said.
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