GST Council Meeting
Union Finance Minister Nirmala Sitharaman will preside over the 56th meeting of the GST Council, which is scheduled for September 3–4 in Delhi. A final decision about the reform of the current GST framework is anticipated from the council, which consists of the finance ministers from each state and union territory.
Transition to a Two-Tier GST Framework
Officials said the council might agree to remove the 12% and 28% GST slabs, leaving only the 5% and 18% normal slabs. The tax rate on luxury goods would be 40%. There are currently four GST slabs: 5%, 12%, 18%, and 28%.
This plan was already approved by the Group of Ministers (GoM) last week. “We have endorsed the Center’s request to abolish the 12% and 28% slabs,” GoM coordinator Samrat Chaudhary affirmed. The GST Council is currently considering the case for ultimate approval.
PM Modi’s Declaration on Independence Day
Prime Minister Narendra Modi had hinted at significant reforms on Independence Day, promising a “huge Diwali gift” in the form of next-generation GST reforms that would cut the cost of basic goods and lessen the tax burden on the general public.
Things That Could Get Cheaper
Several items that are now taxed at 12% may drop to 5% if the slabs are reduced. These items include:
- branded snacks, dry fruits, toothpaste, soap, and hair oil
- Typical HIV/TB kits, immunizations, pain relievers, and medications
- Condensed milk, frozen veggies, and processed foods
- Computers, smartphones, sewing machines, pressure cookers, and geysers
- Bicycles, cutlery, shoes (₹500–1,000), and ready-made clothing (₹1,000 and more)
- Public transportation vehicles, solar water heaters, and agricultural equipment
- Likewise, items falling under the 28% slab can drop to 18%, including:
- Ready-mix concrete, chocolates, cosmetics, and cement
- Conditioners, TVs, refrigerators, dishwashers, and washing machines
- Coffee products, protein and sugar concentrations, and private aircraft
- Printers, tempered glass, aluminum foil, and rubber and plastic products
- Dental floss, manicure kits, and razors
