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Informist, Tuesday, Feb. 11, 2025

 

--Sitharaman: GST Council working on rationalising rate slabs 

 

NEW DELHI – Finance Minister Nirmala Sitharaman Tuesday said the GST Council is working on rationalising the rate slabs under the Goods and Services Tax. "GST Council has gone into great details of looking item by item by item to see where rate reduction can happen. And equally, four rates or three rates or two rates or collapse into one rate is also being discussed," Sitharaman said while replying to a question in the Rajya Sabha.

 

"Every finance minister from every state is doing their maximum best so that GST can become simpler and lesser in terms of compliance difficulties," she said. 

 

The finance minister said the narrative that indirect tax rates have risen after the introduction of GST is false, and instead, rates have come down from when the GST was introduced in 2017. 

 

"Not even in one item has the GST, after being introduced, raised the rate," Sitharaman told the Upper House. "At the point of GST's introduction, on an average, 15.8% tax could have been levied without additionally burdeing the consumer. If that was the rate at which the GST rates were brought in, today, the rate has come down to 11.3%."

 

The proposal to reduce the number of slabs from current four - 5%, 12%, 18%, and 28% - to three, by merging 12% and 18% has been on the GST Council's table for a while. At the GST Council's meeting in December, the rate rationalisation panel's interim report recommending rate tweaks on 148 items was deferred. Sitharaman had said at the time that Council members were of the view that more details need to be worked out before rate changes can be announced.

 

Earlier this month, Central Board of Indirect Taxes and Customs Chairman Sanjay Agarwal said there is "nothing majorly wrong" with the current four-slab GST rate structure. The main task of the rate rationalisation panel is to ensure that each item or service is treated in a uniform manner, rather than putting them into multiple tax slabs based on their ingredients or classification, Agarwal told Informist.  End

 

Reported by Shubham Rana

Edited by Tanima Banerjee

 

 

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