New Delhi: The 56th meeting of the GST Council is scheduled to be held on September 3 and 4 in New Delhi. Before this meeting, GST officials from various states gathered in Delhi today to discuss proposals related to changes in GST rates and compliance issues. This meeting is expected to bring significant decisions on reducing GST rates on about 175 items.
The agenda includes proposals to simplify GST rates by focusing mainly on two slabs - 5 percent and 18 percent. At the same time, there is a plan to remove the 12 percent and 28 percent GST slabs. For sin goods, luxury items, and demerit goods, a special GST rate of 40 percent may be applied.
Important reforms related to return filing, refunds, and compliance are also expected to be proposed. If the GST rates are cut, many items will become cheaper for consumers.
The proposal includes reducing GST rates on nearly 175 goods. Most essential goods are recommended to have either nil or 5 percent GST. There is also a recommendation to remove GST on health and life insurance premiums. Consumer durables such as TVs, air conditioners, refrigerators, washing machines, and cement could see their GST rate lowered to 18 percent. Luxury and sin goods might face a high special GST rate of 40 percent or 40 percent plus additional duties.
It is proposed that GST on items currently taxed at 12 percent or 18 percent could be reduced to 5 percent. This includes textiles, carpets, ready-made garments, footwear, tractors, tires, fertilisers, medicines, shampoos, soaps, toothpaste, and more. There might also be relief on hotel bills, especially for room rents up to ₹7,500 per day.
At the same time, GST rates on chemical wood pulp, gas mining services, and business class airline tickets may be increased to 18 percent.
As part of the proposal, the government plans to keep only two main GST rates - 5 percent and 18 percent - and eliminate the 12 percent and 28 percent slabs. The move to exempt health and life insurance premiums from GST aims to provide relief to the general public.
The special 40 percent GST rate on luxury and sin goods is also part of the rationalisation plan. These GST reforms are expected to reduce the tax burden on small consumers and businesses. This meeting, chaired by Finance Minister Nirmala Sitharaman, will include representatives from 31 states and union territories. The much-awaited decision on GST rate cuts will be finalized during this meeting.
Once these decisions are implemented, prices of food, beverages, and products like TVs, refrigerators, cars, and bikes may become cheaper, offering economic relief to consumers across the country.
