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
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.
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
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.