GST Slabs Changed: GoM accepts Centre's proposal of two-slab GST of 5, 18%
The final decision on these recommendations will be taken by the GST Council in its next meeting scheduled in September.
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The Group of Ministers (GoM) on GST rate rationalisation on Thursday endorsed the Centre's proposal to shift to a two-slab structure of 5% and 18%.
Bihar Deputy Chief Minister Samrat Choudhary, who heads the six-member panel, said the GoM has also agreed to do away with the existing 12% and 28% slabs.
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Only 2 Slabs Of GST: 5% And 18%
'Both the proposals of the Centre have been accepted by the GoM on rate rationalisation,' Choudhary told reporters after the meeting of the panel.
Uttar Pradesh Finance Minister Suresh Kumar Khanna said the Centre's proposal also includes levying 40 per cent tax on ultra luxury and sin goods.
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West Bengal Finance Minister Chandrima Bhattacharya said her state has proposed a levy on top of the 40 per cent GST rate so that the current tax incidence on ultra luxury goods, like cars, and sin goods, is maintained.
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Bhattacharya said the Centre's proposal did not mention the revenue loss that would accrue to the Centre and states after the implementation of the new GST slabs.
At present, Goods and Services Tax is a 4-tier structure of 5, 12, 18 and 28 per cent. While food items are either taxed at 0 or 5 per cent, luxury and sin goods are taxed at 28 per cent. On top of the 28 per cent slab, cess at varied rates is levied on demerit and luxury goods, like cars.
PM Modi On GST Reforms
In his Independence Day speech, Prime Minister Narendra Modi had announced restructuring aimed at rationalising the existing GST structure, which currently includes multiple tax slabs per cent, 12 per cent, 18 per cent, and 28 per cent.
The move to eliminate the 12 per cent and 28 per cent brackets is being seen as part of a broader effort to simplify the indirect tax regime and reduce classification disputes.
The final decision now rests with the GST Council, which will consider the recommendations and feedback from various states before implementing any changes.
Story Highlights
What Is GST Reforms? What Are New GST Slabs? PM Modi On GST Reforms In Independence Day Speech Old GST Slabs Removed
The Finance Minister on Wednesday addressed the Group of Ministers (GoMs) constituted by the GST Council on Compensation Cess, Health and Life Insurance (for individuals), and Rate Rationalisation at Vigyan Bhawan.
(With Inputs From Agencies)
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