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GST Slab Rates 2025: The GST Council may eliminate the 12% tax slab, reducing the GST slabs from four to three. The Council, chaired by the Union finance minister.
Currently, there are majorly four tax slabs under the GST regime — 5%, 12%, 18% and 28%.
GST Slab Rates 2025: The GST Council is likely to soon consider a plan to eliminate the 12% tax slab, thus reducing the GST slab count from four to three, according to a CNBC-TV18 report citing sources. The Council is expected to meet in June-end or July, ahead of the monsoon session of Parliament.
“GST (goods and services tax) collections above Rs 2 lakh crore give confidence to the Council to consider trimming slabs,” one of the sources was cited by CNBC-TV18 as saying.
It added that the Council, chaired by the Union finance minister and comprising state counterparts, can trim rates by removing the 12% slab while keeping revenue neutrality in place.
Currently, there are majorly four tax slabs under the GST regime — 5%, 12%, 18% and 28%. However, apart from this, there is a 3% GST on jewellery as well.
According to a Hindustan Times report, most union and state government officials, experts and GoM representative have supported the plan to remove the 12% GST slab.
The report said that the items falling under this slab could be shifted to either 5% or 18%.
However, according to a CNBC Awaaz report, “Many officials have advocated that daily-use mass consumption items should be shifted to the 5% tax slab.”
Items Under the 12% GST Slab?
Currently, the 12% tax slab in India is applicable on a variety of goods and services. Here are some of the items:
Goods Under 12% Slab:
- Processed and Packaged Foods: Items like butter, ghee, cheese, fruit juices, jams, jellies, and namkeens (including bhujia).
- Dried and Preserved Fruits: Products such as almonds, dates, and other dried fruits.
- Beverages: Fruit juice-based drinks and packed coconut water.
- Household Items: Umbrellas, specific household utensils, and furniture made of cane or wood.
- Stationery and Accessories: Pencils, crayons, handbags, and shopping bags made of jute or cotton.
- Footwear: Priced below Rs 1,000.
- Diagnostic Kits: Various medical diagnostic kits.
- Construction Materials: Marble and granite blocks.
Services Under 12% Slab
- Hospitality Services: Hotel accommodations priced up to Rs 7,500 per day.
- Air Travel: Passenger transport by air in non-economy classes.
- Construction Services: Certain specified construction works.
- Multimodal Transportation: Some types of multimodal transportation services.
- Professional Services: Certain professional, technical, and business services.
It is not yet known which items will be placed under 5% or 18%. It will be known only after the GST Council take its final decision on the basis of the GoM report, which will be submitted soon. The items that are shifted to 5% will get cheaper and those under 18% might get costlier.
When Will GST Council Decide On The 12% Tax Rate?
The GST Council is likely to discuss the issue in its upcoming meeting, which may take place in June-end or July before the monsoon session of Parliament. The monsoon session will start from July 21.
The GST Council will consider the proposal once it receives the report from the GoM on Rate Rationalisation.
Importantly, the Group of Ministers (GoM) on Rate Rationalisation has not proposed any tax rate cut as of now. The two GoMs, which recommended a reduction in rates and providing exemption to certain categories, are yet to submit their final report to the GST Council.
Around 12 per cent, the average GST rate has fallen below the revenue neutral rate of 15.3 per cent. This has prompted the need to start discussions on GST rate rationalisation.
The GST Council in its meeting in December last year, did not take up the GoM reports on rate rationalisation and rate reduction in health and life insurance.
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to markets, economy and companies. Having a decade of experience in financial journalism, Haris has been previously asso…Read More
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to markets, economy and companies. Having a decade of experience in financial journalism, Haris has been previously asso… Read More
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