GST Council may do away with 5% slab

With most states on board to raise revenue so that they do not have to depend on the Centre for compensation, the GST Council, at its meeting next month, is likely to consider a proposal to do away with the 5 per cent slab by moving some goods of mass consumption to 3 per cent and the remaining to 8 per cent categories, sources said.

Currently, GST is a four-tier structure of 5, 12, 18 and 28 per cent.

 Besides, gold and gold jewellery attract 3 per cent tax.

In addition, there is an exempt list of items like unbranded and unpacked food items which do not attract the levy.

To augment revenueCouncil may decide to prune the list of exempt items

Sources said in order to augment revenue the Council may decide to prune the list of exempt items by moving some of the non-food items to a 3 per cent slab. Sources said that discussions are on to raise the 5 per cent slab to either 7 or 8 or 9 per cent, a final call will be taken by theGST Council.

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Although various options are under consideration, the Council is likely to settle for an 8 per cent GST (Goods and Services Tax) for most items that currently attract a 5 per cent levy.

GST compensation coming to an end in June, imperative that states become self-sufficient

With the GST compensation regime coming to an end in June, it is imperative that states become self-sufficient and not depend on the Centre for bridging the revenue gap in GST collection.

With the Centre sticking to its stand not to extend GST compensation beyond five years, states are realising that raising revenues through higher taxes is the only option before the Council.