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GST may undergo radical changes; May do away with 12% slab for processed foods
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Thursday, 12 June, 2025, 08 : 00 AM [IST]
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Ashwani Maindola, New Delhi
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The Goods and Services Tax regime introduced in 2017 across India may witness some radical changes in its tax structure. It is learnt that the Union Government is having serious consultations on the removal of the '12%' tax slab in order to move towards a three slab tax structure under GST.
In this regard, a meeting of the Group of Ministers may take place soon.
The GoM set up in September 2021 on rationalisation of tax structure has the mandate to review the current tax slab rates and recommend changes in the same as may be needed to garner required resources; and review the current rate slab structure of GST, including special rates, and recommend rationalisation measures, including merger of tax rate slabs, required for a simpler rate structure.
The government meanwhile, has intensified the process of removing the 12% slab of GST, and this issue may be discussed in the next GST Council meeting.
Experts feel that if this proposal is passed, then the prices of many everyday items may change - some may become cheaper and some may become expensive. GST rate of 12% is levied on many everyday items including ghee, butter, cheese, condensed milk, fruit juice, namkeen, and packaged and processed food. Currently, there are four main GST slabs – 5%, 12%, 18% and 28%.
Shankar Thakkar, national secretary, CAIT, said that after removal of 12% slab, if these items are brought in the 5% GST slab, then their prices may fall.
"On the other hand, if the government puts some of these items in the 18% slab, then they will become expensive," opined Thakkar.
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