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GST Council meet likely to give nod to rationalisation of tax slabs
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Wednesday, 03 September, 2025, 08 : 00 AM [IST]
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Ashwani Maindola, New Delhi
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The GST Council Meeting scheduled in the first week of September would give its nod to the proposed rationalisation of the tax slabs.
The rationalisation proposed in the Group of Ministers’ meeting in the previous month proposed two-slab structural reform with most of the items attracting 5% and 18% tax under the GST regime.
However, it remained to be seen whether the proposal by the GoM would be accepted as it was or there would be changes.
If the proposal of the GoM is considered, it is likely to affect a large proportion of the food industry, wherein most of the items are expected to come under the 5% tax bracket from the current 12% bracket.
It is pertinent to mention that Prime Minister Narendra Modi announced the GST reform in his Independence Day speech on August 15.
Currently the tax regime has four slabs of 5, 12, 18, & 28%.
The GST Council, headed by the Union Finance Minister along with all States’ Finance Ministers as members would consider all the proposals for rationalisation.
The reform in GST was long awaited by the industries, particularly, the food processing industry, and besides products, the food industry also wants the tax on machinery to be reduced.
As per reports, the reduction in the tax for all kinds of machinery is yet to be seen but the machinery used for the dairy industry is expected to be reduced to 5%.
Meanwhile, a higher tax slab of 40% is also being discussed for sin goods, like tobacco. However, for carbonated beverages, currently placed under the sin tax bracket, the traders body CAIT urged the GST Council to reduce the taxes.
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