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Following up on Prime Minister Narendra Modi's announcement of rationalising the indirect tax regime, the Group of Ministers (GoM) on Thursday supported the removal of the 12% and 28% slabs of Goods and Services Tax (GST), with some suggestions. Now, the proposal will be submitted to the GST Council for final consideration.Â
As it receives final approval from the GST Council, only two GST slabs will remain, i.e., 5% and 18%, out of the four currently in existence. The Centre may now introduce a 40% slab for ultra-luxury goods.Â
The GST Council has all states as its members and is led by Union Finance Minister Nirmala Sitharaman. It will consider their feedback, along with the questions regarding the states' share, as well as their compensation for revenue loss.Â
Bihar Deputy Chief Minister Samrat Choudhary, convenor of the GOM on Compensation Cess, Health and Life Insurance, and Rate Rationalisation, constituted by the GST Council, said, "Everyone made suggestions over the proposals made by the Centre. Some states have a few observations. This has been referred to the GST Council."Â
West Bengal Health Minister Chandrima Bhattacharya told the media, "I raised in the meeting that if the states are going to lose the revenue...then we want to know how we are going to be compensated. The GoM will now send its report to the GST Council with the notings of our concern."Â
Adding, "We don't know what is the revenue loss by this GST rate cut. They have not assessed yet. In the GST Council, we will get to know."Â
Uttar Pradesh Finance Minister Suresh Khanna told news agency PTI, "The presentation given at the Centre did not mention how much loss is being incurred. But, our point is that the common people should benefit from this."Â
The removal of the 12% and 28% GST slabs comes under the wider aim to simplify the tax regime and cut disputes. The move was announced by Prime Minister Narendra Modi in his Independence Day speech this year.Â
