Quick Summary
Despite the Centre's push to simplify the Goods and Services Tax (GST) structure by eliminating the 12% tax slab, the Group of Ministers (GoM) on GST rate rationalisation remains divided on the proposal. The lack of consensus has stalled progress on GST reform, making Finance Minister Nirmala Sithar
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FAQ :
The Centre is pushing to eliminate the 12% GST tax slab, aiming to simplify the tax structure into a three-rate system: 5%, 18%, and 28%.
The 12% GST slab contributes only 5% to the total GST revenue, making it the least significant. The government aims to simplify the tax system and potentially boost economic growth.
States are concerned about potential revenue losses, uneven tax burdens on certain industries, and the possibility of price increases for essential goods and services.
The six-member GoM is led by Bihar Deputy CM Samrat Chaudhary.
Finance Minister Nirmala Sitharaman is likely to engage with the GoM in April 2025, after the Budget session, to help resolve the differences.
Economists suggest that a simplified tax regime could boost consumption, ease tax compliance, and reduce litigation, ultimately spurring economic growth.
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