GST Overhaul: Council to Mull Major Slab Restructuring
The GST Council's upcoming meeting will explore simplifying tax compliance by reducing GST slabs from four to two, retaining only 5% and 18% rates. Proposed reforms aim to enhance efficiency and ease burdens on businesses, with potential new 40% slab for 'sin goods'.
- Country:
- India
In a significant move towards restructuring the Goods and Services Tax (GST) system, the 56th GST Council meeting is set to convene for two days in the national capital starting tomorrow. The council will consider reducing the current four GST slabs to two, which could greatly simplify the compliance process and improve efficiency for businesses.
Sources indicate that the Central Government is proposing to eliminate the 12% and 28% GST rates, retaining only the 5% and 18% rates. The proposal suggests transferring 99% of goods in the 12% slab to 5% and 90% of items from the 28% slab to 18%. A new 40% slab could be introduced for certain 'sin goods' such as tobacco.
This anticipated change follows Prime Minister Narendra Modi's Independence Day announcement hinting at major GST reforms. Union Finance Minister Nirmala Sitharaman highlighted today that the upcoming changes are part of a next-generation GST reform aimed at further reducing compliance burdens, especially for small businesses.
(With inputs from agencies.)
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