The Centre has proposed to reduce the number of slabs under the Goods and Service Tax system. Government sources said the proposal has been sent to the GST Council, which will hold a two-day meeting in September to finalize the changes.
The proposed reform aims to move most of the goods that are currently in the 12 per cent slab to 5 per cent slab, while 90 per cent of goods and services currently at 28 per cent would be moved to the 18 per cent tax slab.
Common-use items will continue to be in the zero or 5 per cent slab, while rates below 5 per cent for gems and jewellery, gold, diamonds will remain unchanged. While sin goods like tobacco and pan masala facing a 40% GST.
These reforms come just hours after Prime Minister Narendra Modi, in his Independence Day speech, announced plans to introduce “next-generation” reforms in the GST regime, focused on reducing taxes on essential items, simplifying the rate structure, and easing compliance costs.