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Stimulus mode: on GST rate cuts
GST cuts reflect buoyancy, but Centre-States cooperation must be maintained
Unveiling(अनावरण ) a mini-Budget of sorts in the middle of the financial year, the Goods and Services Tax Council(समिति/परिषद्) has announced a reduction(छूट/कमी) in the tax rates for over 85 goods. The applicable indirect tax rates on consumer durables(टिकाऊ वस्तुएं/टिकाऊ) such as television sets, washing machines and refrigerators, along with a dozen other products, have been slashed(छोटा करना) from 28% to 18%. The tax rate on environmentally(पर्यावरण की दृष्टि से) friendly fuel cell vehicles has been reduced from 28% to 12%, and the compensation(मुआवजा/क्षतिपूर्ति) cess levied on them dropped(गिरा दिया।/पतित). This leaves just about 35 products, including tobacco, automobiles and cement, in the highest tax slab of the GSTstructure(संरचना). Rakhis without semi-precious stones, as well as sanitary napkins that attracted 12% GST, have been exempted(छूट प्राप्त) from the tax altogether(पूर्ण रूप से/सर्वथा). Several other products have been placed in lower tax slabs, including those from employment-intensive(प्रधान) sectors such as carpets and handicrafts. On the services front, too, there are important tweaks(बदलाव) and clarifications(स्पष्टीकरण). Overall, industry(उद्योग/व्यवसाय) and consumers may consider(विचार करें/ध्यान रखना) these rate cuts, largely on products and services of mass use, as a stimulus(प्रोत्साहन/उत्तेजना)to drive consumption(उपभोग/खपत) ahead of the festive season. It is also a sign that the government has begun the groundwork to woo voters ahead of State and parliamentary elections.
Whichever way one looks at it, the GST Council’s 28th meeting has significantly(महत्व के साथ/काफी )altered the course of the nearly 13-month-old tax regime(शासन/व्यवस्था). Given that GST rates on more than 200 items were already tweaked in past meetings, the original rate structure has been upended to a great extent. The actual impact(प्रभाव/असर) of these changes on product prices and consumption demand(मांग/अनुरोध) will be visible(दिखाई/प्रत्याक्ष) soon, but the government’s confidence in such a rate reduction gambit(पहला क़दम) indicates(संकेत करना) it is now comfortable(आरामदायक/सुखद) with revenue(आय/राजस्व) yields(पैदावार/उपज) from the GST. Estimates(मूल्यांकन करना/अनुमान) of revenue losses from these rate cuts vary widely(व्यापक रूप/दूर तक), but it’s too early to fret about the impact on macro fiscal(वित्तीय/राजस्व) numbers. If implemented(कार्यान्वित) well, the revenue lost could be offset by higher consumption that may lead to more investments over time. Moreover, improvements(सुधार/उन्नति)in compliance can be expected from the Council’s decision to further simplify paperwork for small and medium enterprises(उद्यम/उपक्रम). But there are two major concerns. First, since the new rates are to kick in from July 27, companies may not have enough time to rework(पुनर्विक्रय ) pricing(मूल्य निर्धारण) strategies(रणनीतियाँ)and replace existing (मौजूदा )market inventory(सूची), failing which they could face anti-profiteering action. Second, members of the Council have for the first time questioned its functioning and alleged(कथित तौर पर/थोपा हुआ) that not all of the changes and rate cuts were placed on the agenda. For a tricky tax that is still a work in progress, distrust(संदेह/आशंका) between the Centre and the States would make further rationalisation(युक्तिकरण) difficult. Such friction(टकराव/मनमुटाव) must be avoided in a system in which the States have so far worked in tandem(मिलकर) with the Centre.
Important Vocabulary
1.Reduction(छूट/कमी)
Synonyms: contraction, cut, cutback, devaluation, discount
Antonyms: increase, enlargement
2.Durables(टिकाऊ वस्तुएं/टिकाऊ)
Synonyms: consumer durables, consumer goods, durables, hard goods
3.Tweaks(बदलाव)
Synonyms: tease, twist, jerk, pinch, pluck
4.Compensation(मुआवजा/क्षतिपूर्ति)
Synonyms: allowance, benefit, bonus, coverage, earnings
Antonyms: debt, hurt, loss, penalty, damage
5.Stimulus(प्रोत्साहन/उत्तेजना)
Synonyms: catalyst, encouragement, fillip, impetus, incentive
Antonyms: block, discouragement, hindrance, deterrent, tranquilizer
6.Consumption(उपभोग/खपत
Synonyms: drinking, expenditure, utilization, burning, damage
Antonyms: building, construction, creation, development, enlargement
7.Revenue(आय/राजस्व)
Synonyms: credit, dividend, earnings, fund, gain
Antonyms: debt, loss, payment
8.Gambit(पहला क़दम)
Synonyms: artifice, design, device, gimmick, jig
Antonyms: frankness, honesty
9.Distrust(संदेह/आशंका)
Synonyms: disbelief, doubt, misgiving, mistrust, skepticism
Antonyms: belief, certainty, confidence, faith, trust
10.Friction(टकराव/मनमुटाव)
Synonyms: agitation, erosion, irritation, resistance, abrasion
Antonyms: agreement, harmony, peace
11.Tandem(मिलकर)
Synonyms:club, company, lineup, organization, party
Antonyms: individual, one, single, teammate
