The GST Council has approved rate rationalisation, introducing a two-slab structure with 5% and 18% as standard rates, along with a 40% special rate for sin goods. Uttar Pradesh Finance Minister Suresh Khanna told Business Today TV that the Council has decided to abolish the 12% and 28% slabs, shifting most items into the 5% and 18% categories. The changes will take effect from September 22.
The two-day meeting of the apex tax panel, chaired by Union Finance Minister Nirmala Sitharaman, began on September 3 and will conclude on September 4.
Eight opposition-ruled states have urged the Centre to compensate for potential revenue losses if the proposal to rationalise the Goods and Services Tax (GST) structure is approved at the ongoing GST Council meeting. The states include Himachal Pradesh, Jharkhand, Kerala, Punjab, Tamil Nadu, Telangana, West Bengal, and Karnataka. After the meeting, Jharkhand Finance Minister Radha Krishna Kishore said, “We have asked for an additional levy; the Centre said they will consider.
GST Council approves two-tier tax structure
The GST Council on Wednesday approved a two-tier rate structure of 5 and 18%, which will be implemented from September 22. Bihar Deputy Chief Minister Samrat Choudhary said that all states were on board for the rate rationalisation, and it was a consensus-based decision.
West Bengal Finance Minister Chandrima Bhattacharya said the total loss due to GST rate rationalisation would be ₹47,700 crore. Uttar Pradesh Finance Minister Suresh Khanna said no decision has been taken on the tax incidence on demerit goods, and imposing a levy over and above the 40% would be decided later.
GST Council clears the centre’s proposal of 5%, 18% and 40%
Tax Concept is a dedicated team of financial writers, legal analysts, and tax professionals committed to breaking down complex Indian corporate updates. From real-time GST amendments and crucial Income Tax judgements to EPFO schemes and corporate law updates, TaxConcept serves as a reliable, authoritative guide for chartered accountants, businesses, and everyday taxpayers seeking absolute compliance clarity.