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Informist, Thursday, Aug. 21, 2025

 

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--Bihar minister: GoM on GST rationalisation OKs Centre's 2-slab plan
--UP minister: States agree to GST rate cut despite revenue loss 
--UP minister: States welcomed Centre's proposal to cut GST rates 
--Bihar minister:GoM on GST rationalisation to send Centre's plan to Council 
--CONTEXT: Group of Ministers on GST rate rationalisation met Thu 
--Bengal minister: Told Centre to ensure cos don't profiteer post GST cut
 

 

NEW DELHI – The Group of Ministers on goods and services tax rate rationalisation has accepted the Centre's proposal to shift to a two-slab GST structure, its Convenor and Bihar Deputy Chief Minister Samrat Choudhary said Thursday. "Our proposal will now be sent to the GST Council, where a final call will be taken," he told reporters after a meeting of the panel here. The Group of Ministers, however, has not yet worked out the exact revenue implications of the proposed GST rates overhaul. 

 

On Independence Day, Prime Minister Narendra Modi had announced a "Diwali Gift" for Indians in the form of lower GST rates. In its recommendation to the Group of Ministers, the Centre had suggested doing away with the 12% and the 28% tax slabs. "All states have welcomed the proposal as it is consumer-friendly," the committee member and Uttar Pradesh Finance Minister Suresh Khanna said, adding that many states have agreed to the plan irrespective of the revenue implications it may have.

 

The Centre has proposed to bring 99% of items under the 12% tax slab to the 5% slab and almost 90% of items under the 28% tax slab to the 18% tax slab. Currently, 65% of the total GST revenue comes from items falling under the 18% tax slab and 11% revenue is collected from items under the 28% slab. Only 7% and 5% GST is collected from items under 5% and 12% tax slabs, respectively. 

 

The six-member Group of Ministers was tasked to recommend trimming the list of items exempt from GST, reassess tax rates, and correct the inverted duty structures. Besides Choudhary and Khanna, the panel also has Kerala Finance Minister K.N. Balagopal, Karnataka Revenue Minister Krishna Byre Gowda, West Bengal Finance Minister Chandrima Bhattacharya, and Rajasthan Medical and Health Services Minister Gajendra Singh.

 

The proposed changes are expected to boost consumption as prices of many items may come down and spur growth in the economy. As the ultimate aim of the move is to lower the tax burden on consumers, the Centre should bring in a mechanism to keep a check on undue profiteering by companies and ensure the lower tax benefit is passed on to end-customers, Bhattacharya said. 

 

The risk of profiteering is acute, as there have been occasions in the past when tax rate cuts announced by the GST Council have not been passed on to consumers and instead companies have increased their profit margins. In November 2017, after the council reduced GST rates on restaurants to 5% from 12% and 18%, anti-profiteering investigations were initiated against some restaurants for allegedly not passing on the benefit of reduced taxes to customers.  End

 

Reported by Priyasmita Dutta and Sagar Sen

Edited by Saji George Titus

 

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