To eliminate the 12% tax slab of GST, some items can be put in 5% tax slab and some in 18% tax slab. With the elimination of 12% tax slab, only 3 tax slabs of GST will remain. Currently, there are 4 tax slabs of GST
There may be a change in the GST rate of some items. The Group of Ministers on GST may gradually eliminate the 12 percent slab by putting some items in the 5 percent slab and some in the 18 percent slab. Its purpose is to simplify the tax framework and reduce tax compliance for businesses. People associated with this matter told Moneycontrol this. After removing the items from the 12 percent slab, this slab ended. Then instead of four, there will be only 3 slabs of GST – 5 percent, 18 percent and 28 percent.
Focus on simplifying the GST system
A person aware of the matter said on the condition of anonymity that this could be another option instead of merging the 12% and 18% slabs. The proposal to merge the two slabs has been under consideration for a long time. Another source said that the 12% slab is expected to cease to exist. It has been 7 years since the GST system was implemented. In such a situation, the pressure on the GST Council to rationalize the slabs has increased.
The burden of compliance on businesses will be reduced
Experts say that simplifying the GST system and reducing the number of slabs will reduce the compliance burden on businesses. Rajat Mohan, executive director of consultancy firm Mor Singhi, said that by putting things falling in 12% slab in 5% or 18% slab, the need for 12% slab will end. This can be a big step towards simplifying the tax structure.
Group of ministers may submit report this month
The chairman of the group of ministers formed to simplify GST rates is Bihar’s Deputy Chief Minister Samrat Chaudhary. It is expected that this group will submit its report this month. After this, this report can be considered in the GST Council meeting next month. The source who gave information about this said that the proposal to remove items from the 12 percent slab is being worked on. But it will take time, because the states will give their consent only after understanding its impact on revenue.
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