GST Council denied any plan to increase the tax slab
New Delhi: The GST Council has given a clarification regarding seeking opinion from the states on the increase in GST rates. Sources said on Sunday that the GST Council has not sought the views of the states on the increase in tax rates. According to sources, the panel of ministers contemplating rationalizing the GST rate is yet to submit its report to the GST Council, only after that the GST Council will take a decision on the tax rate.
No proposal to bring more than half the items in 28% slab
Sources said that the GST Council has not sought the views of the states for increasing the tax rates. Apart from this, there is no proposal to bring more than half the items in the highest GST slab of 28%.
Exempt products can come under the tax net
At present, there are four slabs in GST of 5, 12, 18 and 28%. However, gold and gold jewelery attract a tax of 3%. There are also some unbranded and unpacked products that do not attract GST.
Earlier, sources had said that to increase revenue, the council may decide to cut the list of exempted items by bringing some non-food items in the 3% slab. By eliminating the 5% slab, it can be increased to 7, 8 or 9%.
Additional revenue of 50 thousand on 1% increase
As per the calculations, every 1% increase in the 5% slab (which mainly includes packaged food items) will generate additional revenue of roughly Rs 50,000 crore annually. The council is considering several options but is expected to agree on 8% GST for most items. Currently, the GST rate on these products is 5%.
The meeting may be held in the middle of May.
Last year, the council had constituted a committee of state ministers under the chairmanship of Karnataka Chief Minister Basavaraj Bommai. Its task was to find ways to increase revenue by rationalizing tax rates and removing discrepancies in the tax structure. The Group of Ministers is likely to give its recommendations early next month. The next meeting of the GST Council is likely to be held in mid-May.
GST Council constitutes a panel of state ministers
It is worth noting that last year the GST Council had constituted a panel of state ministers, which was headed by Karnataka Chief Minister Basavaraj Bommai. This panel of state ministers will suggest ways to increase revenue by rationalizing GST rates.