GST council to do away with 5 pc tax slab

With most states on board to raise revenue so that they don't have to rely on the Central government for compensation, the GST Council is expected to consider a proposal to do away with  the 5 percent slab by moving some goods of consumption  to 3% and the rest to 8% categories at its meeting next month, according to sources. Goods and Services Tax is currently divided into four tiers: 5, 12, 18, and 28 percent. Furthermore, gold and gold jewellery are subject to a 3% tax.

There is also an exempt list of items, such as unbranded and unpackaged food, that are not subject to the charge. The Council may opt to reduce the list of exempt items by transferring some non-food items on the 3% slab in order to increase income. source said, talks are on to raise the 5% tax rate to either 7%, 8%, or 9%, with the GST Council, which includes finance ministers from both the federal and state governments, making the ultimate decision. As per projections, a 1% increase in the 5% slab, which primarily contains packaged food goods, would generate an additional revenue of Rs 50,000 crore per year.

Despite the fact that several possibilities are being considered, the Council is expected to agree on an 8% GST for most items that are presently subject to a 5% levy. Essential commodities are excluded or taxed at the lowest rate under GST, whilst luxury and demerit items are taxed at the highest rate. On top of the highest 28 percent slab, luxury and sin items are subject to a cess.

RBI likely to get quite perturbed with inflation above 6 pc in 3 quarters

Pvt-sector capex picking up in H2FY23: Chief Economic Advisor

India's industrial output increased by 1.7 pc in February

- Sponsored Advert -

Most Popular

- Sponsored Advert -