GST rate slab structure set to revamp

Posted on 13 June 2022 Category : GST

Goods and Service Tax slab structure revamp

As of now, the GST has five slabs of zero per cent, 5 per cent, 12 per cent, 18 per cent and 28 per cent. In wake of growing revenue concerns, the Goods and Services Tax council may consider revamping tax structure and raising the existing base slab 5 % to 9 -10%, while doing away with the 12% rate and moving 243 items in this segment to the 18% to shore up the shortfall in collections. The slab restructuring may assist government with collecting extra revenues of Rs 1,000 crore per month.

According to the government data, the 5 per cent slab contributes to nearly 5 per cent of GST collection. These moves that will increase the tax burden on consumers, but the government's monthly GST collection target is about Rs 1lakh crore.

A major revamp of goods and services tax structure is on cards when the GST Council meets during second fortnight of December to revamp the existing tax structure and compensation cess rates. when meetings of the Council largely focused on rate cuts on host of goods and services to bring about uniformity in the taxation, the forthcoming GST Council meeting is expected to focus on bringing exempted items under the tax net while considering changes in tax rates and compensation cess for other products with the prime idea to boost GST revenue and prevent delays in payment of compensation cess to states.

5per cent slab items that may move to higher slabs are Branded cereals, flour, paneer, palm, olive oil, pizza bread, cocoa paste, dry fruits, whey, silk, linen fabric and those used in men’s suit, cruise travel, economy class air travel, 1^st or 2^nd class AC train travel, excursion boats, tour services, outdoor catering, restaurants etc. 12% slab items are mobile phones, business class air travel, state-run lotteries, expensive paintings, hotel rooms that cost Rs 5000-7500 etc.

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