In a key development on GST reforms, a Group of Ministers (GoM) meeting on Thursday concluded with state finance ministers agreeing to the Centre’s proposal to rationalise GST rates. The plan, led by Bihar Deputy Chief Minister Samrat Choudhary, seeks to streamline the current four tax slabs of 5%, 12%, 18%, and 28% into just two main rates.
Under the new structure, “merit” goods and services will attract a 5% GST, while most other items will fall under an 18% standard rate. A higher 40% levy will remain on a limited set of so-called sin goods, including alcohol, tobacco, drugs, gambling, soft drinks, fast food, coffee, sugar, and pornography. Sin taxes are designed to discourage consumption and reduce the societal harm caused by these products.
Finance Minister Nirmala Sitharaman emphasized that a simplified GST system would benefit common citizens, farmers, the middle class, and small businesses, while making the tax regime more transparent and growth-oriented. Nearly all items currently taxed at 12% will now be moved to the 5% slab under the proposed reforms.
(This story is published from a syndicated feed)