GST rate rationalisation: GoM discusses pruning 12% slab, next meeting on October 20

GoM discusses tax rate changes on items, including lowering taxes from 12% to 5% for common man relief.

The Group of Ministers (GoM) on GST rate rationalisation has discussed tax rate tweaks on over 100 items, including lowering taxes on certain goods from 12% to 5%, to give relief to the common man, West Bengal Finance Minister Chandrima Bhattacharya said on Thursday, September 26, 2024.

The next meeting of the GoM is scheduled on October 20, Ms. Bhattacharya said, adding that rationalising taxes on bicycles and bottled water will be part of the discussion.

Also Read: GST Council to deliberate on taxation of insurance premium, report on online gaming

The six-member Group of Ministers (GoM), which had met on Wednesday (September 25), also took up the issue of tax rate cut on medical and pharma-related items in the 12% slab and decided to discuss it in its meeting next month.

To make good the revenue loss that will be incurred on account of lowering the tax rate on such items, the GoM also discussed the possibility of raising tax rates on some items, including aerated water and beverages, from the current 28 per cent GST, plus cess.

Currently, goods and services tax (GST) is a four-tier tax structure with slabs at 5%, 12%, 18%, and 28%. However, as per GST law, tax of up to 40% can be imposed on goods and services.

"The average tax rate under GST has fallen to 11.56% in 2024. West Bengal has suggested that the decision taken at the 23rd meeting of the GST Council in which tax rates were slashed on 178 items by pruning the 28% slab should be revisited. This would help to garner more revenues while at the same time give relief to common man by bringing items down to 5%," Mr. Bhattacharya said.