The Narendra Modi Government on Monday, April 18th, 2022, denied media reports pertaining to the planning of the Goods and Services Tax (GST Council) to raise the tax slab from 5% to 8%.
Currently, the GST has a four-tier slab structure of 5, 12, 18, and 28 %. The gold and gold jewellery attract tax @3%.
There were media reports that the Council may decide to cut - back the list of exempt items by moving some of the non-food items to 3% slab to raise revenue. Also, to raise the 5 per cent slab to either 7/8/9%.
A panel of state ministers, headed by Karnataka Chief Minister Basavaraj Bommai, has been set up last year by the Council, to suggest ways to augment revenue by rationalising tax rates and correcting anomalies in the tax structure. The panel included West Bengal finance minister Amit Mitra, Kerala finance minister KN Balagopal and Bihar deputy chief minister Tarkishore Prasad.
According to Government sources, the Group of Ministers has still not prepared its report on rate rationalisation and it is yet to be submitted to the council.
Also, the finance minister Nirmala Sitharaman, who is the chairperson of the GST council, is currently in the United States to attend IMF and G20 meetings, the date for next meeting is also not set.
The last GST council meeting was held on December 31, 2021.
Under GST, essential items are either exempted or taxed at the lowest rate while luxury and demerit items attract the highest tax (Luxury and sin goods also attract cess).
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