Indian PM Narendra Modi promises his government will slash GST rates on over two dozen consumer items in the highest tax category

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• GST rate cuts will cover nearly 25 categories under the country’s Goods and Services Tax (GST) that fall under the highest tax slab of 28%.
  
• An estimated 1,200 items will remain in the highest tax category that most include luxury or ‘sin’ items.
  
• Items that could become cheaper may include cement, certain television sets, digital cameras and movie tickets.

Ahead of elections, Indian Prime Minister Narendra Modi has promised further cuts on nearly 25 categories under the country’s Goods and Services Tax (GST) that fall under the highest tax slab of 28%.

On Tuesday, Modi said that his government is working towards making only 1% of items in the highest tax category of 28% and all other consumer goods and services will attract GST tax rates of 18% or less. An estimated 1,200 items will remain in the highest tax category that most include luxury or ‘sin’ items including luxury cars, aircraft, televisions, alcohol and tobacco products.

Other items that could become cheaper may include cement, certain television sets, digital cameras and movie tickets, Indian Express reported.

Earlier this year, India’s GST Council removed about 14 items from the highest tax category. India currently has four slabs for GST: 5%, 12%, 18% and 28%. About 40% of products and services fall under the 18% tax category.

The move comes just months ahead of India’s general elections and in the wake of the Bharatiya Janata Party losing important ground in three important state elections recently.

The tax cut will, however, be a hit on indirect revenue collection for the government at a time when it is struggling to meet its fiscal deficit target.

The implementation of the GST, India’s biggest tax reform since independence, was one of the biggest items on Modi’s economic reform agenda.

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