In a major relief to middle and lower-income households, the Central government may restructure the Goods and Services Tax (GST) slabs. In a landmark change, GST on some essential items may be reduced to 5 per cent from 12 per cent, while the 12 per cent is likely to be eliminated permanently, according to a report by India Today.
The final decision regarding the current consideration is expected to be taken at the upcoming 56th meeting of the GST Council. Notably, a 15-day notice is to be given before convening a Council meeting. The report, citing sources, said that the GST council meeting may take place later this month.
The items that come under the 12 per cent tax slab are most commonly used by ordinary citizens in everyday life. The items include products that are predominantly used for consumption by the middle-class and economically weaker households.
The plan under consideration deals with reclassifying these items into the lower 5 per cent tax slab, making them effectively cheaper for end consumers. Once the 12 per cent bracket is eliminated, the government may put items either in the existing lower slabs or the higher ones.
Moreover, the move is likely to be politically significant, given the upcoming state elections scheduled for later this year.
The restructuring of GST is likely to ease the inflationary pressure on essential goods, benefiting a large section of the population which consumes items falling under the same category.
The GST Council, headed by the Union Finance Minister and comprising state finance ministers, has the authority to recommend revisions to tax rates.
If implemented, the proposal would constitute one of the most substantial restructurings of GST rates since the indirect tax system was launched in 2017.
Full List Of Goods and Services Under 12 Per Cent GST Slab
- Tooth powder
- Hair oil
- Soaps (some categories)
- Toothpaste (some branded variants)
- Umbrellas
- Sewing machines
- Water filters and purifiers (non-electric types)
- Pressure cookers
- Electric irons
- Water heaters (geysers)
- Vacuum cleaners (low-capacity, non-commercial)
- Washing machines (small capacity)
- Carriages for disabled persons
- Readymade garments (priced above Rs 1,000)
- Footwear priced between Rs 500 and Rs 1,000
- Most vaccines
- Diagnostic kits for HIV, Hepatitis, TB
- Certain Ayurvedic and Unani medicines
- Exercise books
- Geometry boxes
- Drawing and colouring books
- Maps and globes
