GoM nod for simpler GST, but some states flag compensation

THE GST COUNCIL WILL NOW DECIDE ON REMOVING THE 12% AND 28% RATES, RETAINING 5%, 18% SLABS AND ADDING A SPECIAL 40% LEVY

- Rajeev Jayaswal

A group of ministers (GoM) approved, in principle, the Union government's proposal to reduce the number of Goods and Services Tax (GST) brackets from four to two main slabs in order to substantially reduce tax burden on the consumer, although some of the ministers expressed concerns over the revenue implication of the move and sought ways in which the states could be compensated.

The Centre proposed significant GST reforms encompassing structural changes, rate rationalisation, and ease of living measures. It proposed to eliminate two tax slabs of 12% and 28% and retain the 5% and 18% tax rates with a special slab of 40% for so-called luxury and sin goods.