GST Council may consider merging the 12% and 18% tax slab in the next meeting, says Finance Minister Nirmala Sitharaman
- In an interview with The Economic Times, the finance minister said that the GST council would examine the recommendations of reducing four tax slabs to three.
- This has been a long-standing demand from the industry, which the 15th Finance Commission report included in its recommendations.
- The proposal is to reduce GST slabs from the current four i.e. 5%, 12%, 18%, and 28%, to three slabs with the rates of 8%, 18%, and 28%.
- Read on to know which products are likely to be affected after GST slab merger.
|Current GST slabs||Proposed GST slabs|
|5%||Merge to 8% tax slab|
|12%||Merge to 8% tax slab|
This is a long-standing demand from the industry, which the 15th Finance Commission — a body that defines financial aspects of the relationship between the Central government and the states — has agreed with. "We will definitely be talking about it. Whenever the council finds it fit. Sooner, I suppose. Whether it will be in the next meeting itself, I can't speak for the council as yet. We'll have to see," Finance Minister Nirmala Sitharaman said in an interview with The Economic Times.
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The impact on the consumer will depend on the Council’s decision but reducing the tax rate will make the GST regime simpler for the states and, the government would hope, improve compliance.
AdvertisementThese are some of the products that are likely to be affected after GST slab merger:
|Goods under 12% GST||Goods under 18% GST|
|Mobile phones||Household products, including hair oil, toothpaste, shampoo|
|Sauces, ketchup, and mustard sauce,||Aluminium foil|
|Branded Cereals||Optical fibre|
|Air travel tickets||Power Banks|
|Railway coaches,||Shopping bags and handbags|
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