Feb 4, 2025, Wednesday, New Delhi: The GST Council will soon decide on having fewer lower rate cuts as the review work is almost complete, Finance Minister Nirmala Sitharaman said on Tuesday.
Goods and Services Tax (GST) is a four-tier tax structure with slabs at 5,12,18 and 28 percent. Luxury and demerit goods are taxed at the highest bracket of 28 percent, while packed food and essential items are in the lowest 5 percent slab.
The Council, chaired by Siharaman and comprising her state counterparts, has set a group of ministers to suggest updates in GST rates and reduce slabs.
This change is expected to reflect the original intent of having fewer rates and lower rates, and it will be made by the GST Council soon. The Council, chaired by Sitharaman and comprising her state counterparts, has set up a group of ministers (GoM) to suggest changes in GST rates as well as reduce slabs.
The minister also stated that the country’s economic fundamentals are strong, and there is no structural slowdown, with the tax relief in the Budget 2025-26 being a reflection of the prime minister’s commitment to taxpayers. The GST Council’s decision will impact the current tax structure, which includes luxury and demerit goods taxed at 28 percent and essential items taxed at 5 percent.
The minister stated that the country’s economic fundamentals are strong, and there is no structural slowdown, with the tax relief in the Budget 2025-26 being a reflection of the prime minister’s commitment to taxpayers.
Additionally, the capital expenditure has increased to Rs. 11.21 lakh crore, which is 4.3 percent of the GDP, and there is no proposal to shut down the old tax regime.
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