Overview

• The draft next-generation GST proposal sent to states collapses four rates into 5% and 18% slabs with a 40% demerit rate for sin goods and seeks Diwali implementation
• Groups of Ministers are slated to review the plan around August 20–21 before it proceeds to the GST Council for approval in September
• Under the draft, about 99% of items in the 12% slab would move to 5% and roughly 90% of 28% items to 18%, while tobacco, gutka and online gaming face a top 40% rate
• The compensation cess is set to lapse in November, prompting forecasts of a 0.2–0.4% of GDP revenue gap estimated at Rs 1.2 lakh crore annually
• Brokerage and analyst reports predict disinflationary pressure and sectoral boosts for FMCG, consumer durables, autos and cement stocks if cuts are passed through