GST Council meet: Rate cuts, slab rationalisation on agenda; what to expect

Union Finance Minister Nirmala Sitharaman is set to give shape to Prime Minister Narendra Modi’s clarion call for GST reforms as the 56th GST Council meeting begins on Wednesday for a two-day session.

Major rate rationalisation and slab restructuring are expected to simplify the tax regime and ease compliance.

Key points:

• The government is considering a proposal to reduce the current four GST slabs to just two.
• As per government sources, the proposal suggests removing the 12% and 28% GST slabs, retaining only 5% and 18%.
• 99% of items currently under the 12% slab are proposed to be shifted to the 5% slab.
• 90% of items in the 28% slab, including many consumer goods, are proposed to be moved to 18%.
• A new 40% GST slab is being proposed for “sin goods” such as tobacco and pan masala.

Sitharaman, speaking in Chennai, said the upcoming GST reforms will reduce compliance burden and promote ease of doing business, reports ANI.

On August 21, the Group of Ministers (GoM) supported the proposal to remove the 12% and 28% slabs.