GST Council Update: After increasing the income tax exemption limit to Rs 12 lakh in the budget, the government is now considering cutting GST rates to increase consumption.
GST Rate: To boost demand and consumption in the country, the GST Council is now considering cutting GST rates. It is believed that the government can abolish the 12 percent slab GST rate. And the goods coming in this slab can be put in 5 percent or 18 percent slab if needed. The purpose of this exercise is to rationalize the GST rate structure as well as increase consumption.
Mint has given this information in its report quoting sources. According to sources, the suggestions of the Center have been placed before the group of ministers headed by Bihar Deputy CM Samrat Chaudhary. This group of ministers is considering rationalizing the GST rate along with reducing it. In April 2023, 600 items will fall in the 18 percent GST slab, 275 in the 12 percent rate slab, 280 items in the 5 percent slab and about 50 items in the 28 percent slab.
15th Finance Commission chairman NK Singh has also asked for three slabs instead of four GST rates. According to Mint, the Finance Ministry and the GST Council have not given any response on this. The first part of the budget session is over and it is believed that soon a meeting of the GST Council will be called in which this matter will be discussed.
According to a research paper, this is the right time to rationalize the GST rate. According to the National Institute of Public Finance and Policy, the products on which GST exemption is being given are benefiting the rich families more than the low-income group. GST exemption is available on less than 20% of the items in the consumption basket of the poor, whereas there is currently a provision for GST exemption on most of the items in the consumption basket of the rich.
In fact, for a long time there has been a demand that the GST slabs should be changed and the rates should be made logical. Currently there are four slabs of tax under GST. Those four slabs are 5%, 12%, 18% and 28%. There is a provision of separate cess on some luxury and sinful items. There has been a demand to reduce the number of GST slabs from 4 to 3.
