GST Council to meet in September to discuss 2-slab structure
What's the story
The Goods and Services Tax (GST) Council will hold its 56th meeting on September 3 and 4, in New Delhi. The meeting will start at 11:00am on both days. An officers' meeting is also scheduled for September 2, ahead of the main council session. All members have been invited to participate in these discussions.
Reform agenda
Two-slab GST structure proposed
The upcoming GST Council meeting will focus on the proposed tax reforms. The government plans to simplify the current four-slab GST structure into a two-slab system, retaining only 5% and 18% tax rates while eliminating the 12% and 28% slabs. This reform is aimed at benefiting common citizens.
Discussion points
Rate rationalization and compensation cess to be discussed
The high-powered GST Council, led by Finance Minister Nirmala Sitharaman, will also discuss rate rationalization and compensation cess during the two-day meeting in New Delhi. The council comprises finance ministers from all states and Union Territories (UTs). Their deliberations will be based on recommendations from three Groups of Ministers (GoMs) regarding rate rationalization and compensation cess.
GoM consensus
GoM met earlier this week
The GoM, which comprises state ministers, met earlier this week and broadly agreed to the Central government's proposal for a two-slab GST. The proposed reform suggests a GST structure with two rates of 5% and 18%, categorizing goods and services as 'merit' or 'standard.' However, there is a plan to impose a special rate of 40% on select items such as ultra-luxury cars and sin goods like tobacco products and alcohol.