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HomeEconomyGST Council likely to prune list of items falling under 28% slab

GST Council likely to prune list of items falling under 28% slab

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Many items could be brought under 12 per cent tax bracket as the government is trying to find ways of introducing a lower GST slab.

New Delhi: The GST Council, due to meet on 10 November, is likely to prune the list of items falling under the 28 per cent tax bracket, highly-placed sources told ThePrint.

According to the sources, many items could be excluded from the 28 per cent tax slab and brought under the 12 per cent tax limit. They added that the government is trying to find ways of introducing a lower GST slab.

The process has already begun and eventually most of the items falling under the 28 per cent GST slab would either be compressed into 12% or 18% tax bracket.

Sources argue that there are a number of which need not be in the top bracket and that is the reason why the government and the GST Council are pushing for the exclusion of at least 50-60 items from this slab.

“The first phase of rationalisation is aimed at thinning out the 28 per cent slab. Still there would be many items left in the list,” said a source.

Another argument is that had there been only two tax slabs, they would have led to high inflation.

If the government wants to increase tax rates, then items attracting 7 per cent GST may be pushed to 15 per cent bracket. Sources also claimed that 12 and 18 per cent tax slabs could be compressed into one “at a subsequent stage”.

“This is a difficult exercise but it can be done. Had such an exercise was carried out in the beginning, it would have left the market in a state of shock. It will take two-three years to rationalise the GST rates,” added the source.

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