TNI Bureau: In a major decision, the Group of Ministers (GoM) on GST rate rationalization has accepted the Centre’s proposal to move to a two-slab structure of 5% and 18% for Goods and Services Tax (GST).
The main objective of reducing the number of tax slabs is to simplify the current four-tier structure of 5%, 12%, 18%, and 28% and improve compliance.
As per the decision, all the essential goods and services, currently taxed at 0% or 5%, will continue to attract a concessional rate of 5%. Besides, almost all products currently taxed at 12% will be shifted to the 5% slab.
Likewise, most goods and services currently taxed at 18% or 28% will be taxed at the standard rate of 18% following which about 90% of goods and services taxed at 28% will now come under the 18% slab.
However, the centre has decided to levy a GST of 40% on sin goods, including alcohol, tobacco, drugs, gambling, soft drinks, coffee, fast food, sugar, and pornography.