The next meeting of the GST Council is scheduled for June or July, where proposals for significant changes to the country's tax structure will be discussed. A key item on the agenda is the potential elimination of the 12% tax slab.
Business: The upcoming GST Council meeting, tentatively planned for June or July, may see the elimination of the 12% tax slab. This move could reduce the number of tax slabs from four to three. The change may lead to price decreases or increases for various goods. The government aims to simplify the GST system and align it with global standards.
Proposed Elimination of the 12% Slab
The GST Council's next meeting may involve discussions on abolishing the 12% tax slab. Currently, India operates with 5%, 12%, 18%, and 28% tax slabs. The proposed change would streamline the GST system by reducing the number of slabs to three. According to officials, this proposal has received support from the Council's advisors, and the final decision rests with the Council. The last meeting was held in December 2024, while the next is expected in June or July of this year.
Items Included in the 12% Slab and Potential Changes
Currently, the 12% slab includes several everyday items, such as:
- Condensed milk
- Fruit juices
- Bottled drinking water (up to 20 liters)
- Walkie-talkies
- Contact lenses
- Sausages, frozen vegetables, pasta
Other Household Goods
- If the 12% tax slab is eliminated, these items would be shifted either to the 5% or 18% slab. This could result in price reductions for some goods and increases for others. For example:
- Items like fruit juices, snacks, spices, pencils, and umbrellas might move to the 5% slab, potentially leading to price decreases.
- Conversely, items such as carpets, detergents, contact lenses, and plastic goods could be shifted to the 18% slab, potentially resulting in price increases.
The aim of removing the 12% tax slab is to further simplify the GST rate structure. Many countries, including Australia, the UAE, Canada, and Singapore, have only one or two tax slabs. Reducing India's four slabs to three would bring the country's tax structure closer to global standards.
