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- Center refutes reports of GST Council planning to scrap 5% tax slab
- Reports say the government may scrap with 5% tax slab and replace it with 3% and 8%
- Report speculative, no truth, sources said on change in rate slab
ANI quoted government sources as saying that the Center has denied reports of the GST Council’s plan to increase the tax slab from 5 per cent to 8 per cent.
Earlier, reports said that the GST Council was planning to remove the 5 per cent tax slab and replace it with 3 per cent and 8 per cent. The mass consumption items will be kept in the 3 per cent slab while the rest will be kept in the 8 per cent slab.
Sources said that there is no such proposal from the council, in which the news should be termed as untrue rumours.
Meanwhile, a group of ministers from states is yet to finalize a report on rationalization of GST rates and a decision will be taken at an appropriate time, sources said.
The Group of Ministers (GoM) will consider and finalize the recommendations, which will be sent to the GST Council, headed by Finance Minister Nirmala Sitharaman, and will include state finance ministers.
Sources said that rationalization of rates has not been considered by the GoM as of now.
There was a view in some quarters that the 5 per cent slab could be broken down into 3 per cent and 8 per cent and the remaining slabs of 12, 18 and 28 per cent would continue. But let alone the GST Council, the GoM has not yet thought of rationalizing the rates.
Sources said the call for change in rates is a political decision and will have an effect when the GST Council considers it.
Presently, there is a four-tier structure of GST of 5, 12, 18 and 28 per cent. In addition, gold and gold ornaments attract a tax of 3 per cent.
In addition, there is an exemption list of items like unbranded and unpacked food items that do not attract levies.
Earlier, sources said that in order to increase revenue, the council may decide to cut the list of exempted items by moving some non-food items to the 3 per cent slab.
While discussions are on to increase the 5 per cent slab to 7 or 8 or 9 per cent, the final decision will be taken by the GST Council comprising finance ministers of both the Center and the states, he said.
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