GST Council likely to drop 5% rate and categorize goods into 3% & 8% tax slab

New Delhi, April 18 (KNN) The Goods and Services Tax (GST) Council has proposed to end the 5 per cent tax slab and move the mass consumption goods to 3 per cent and other remaining goods to the 8 per cent tax slab.

Currently the tax structure is divided in four rates which is 5, 12, 18 and 28 per cent, with gold and gold jewellery falling under the 3 per cent category.

As per media reports, most states on board aim to raise their revenue so they do not have to depend on Centre for compensation.

The GST Council will discuss the proposal to do away with the 3 per cent tax in a meeting which is scheduled to take place next month.

To increase revenue some of the non-food items from the exempt list will be brought under the 3 per cent slab.

It is also expected that a final decision on to raise the 5 per cent slab to either 7 or 8 or 9 per cent will be taken by the GST Council which comprises finance ministers of both Centre and states.

In view of every 1 per cent increase in the 5 per cent slab which mainly contain food items would generate an estimated revenue of Rs 50,000 crore annually. (KNN Bureau)