The Group of Ministers (GoM) on GST rate rationalisation, in its meeting held in Goa on Wednesday, expressed support for reducing the GST rate on education materials from 12% to 5% to provide relief to a broad section of the population. According to a source familiar with the discussions, the panel also reached a consensus to increase GST rates on textiles and apparel items priced above ₹1,000 from 5% to either 12% or 18%, to achieve "revenue neutrality."
This move aims to bring the weighted average GST rate closer to the revenue-neutral rate (RNR) of 15.5%, which has dropped below 11% due to multiple rate cuts since GST's implementation in July 2017.
The GoM, chaired by Bihar Deputy Chief Minister Samrat Chaudhary, did not address the contentious issues of reducing or exempting GST on health insurance or altering the current four-slab structure of 5%, 12%, 18%, and 28%. These topics, along with other pending matters, will be discussed in the next GoM meetings on October 19 and 20.
The GoM's recommendations, including the potential shift to a three-slab GST structure, are expected to be submitted to the GST Council after the October meetings for further deliberation. A proposal for a three-tier structure of 9%, 18%, and 27% is under consideration, which may replace the current system.
Members of the GoM include key ministers from states such as Uttar Pradesh, Rajasthan, Kerala, and West Bengal.
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