After the increase in the prices of petrol-diesel and cooking oil, now the common man is going to have another hit of inflation. The government can increase the tax rate on the lowest slab of GST. This will directly affect the common man.
Actually, in the next meeting of the GST Council, the lowest tax slab can be increased from 5 percent to 8 percent. With this, the list of exemptions in the GST system can be reduced. A committee of state finance ministers may submit its report to the GST Council by the end of this month. In this, different steps have been suggested to increase the revenue of the government.
Revenue will increase by Rs 1.50 lakh crore
Sources say that by increasing the lowest rate of GST from 5 percent to 8 percent, the government can get an additional annual revenue of Rs 1.50 lakh crore. An increase of one per cent can generate revenue of Rs 50,000 crore annually. This slab mainly includes packaged food items.
Also consider the three-tier structure
Sources say that the committee of finance ministers may also consider a three-tier GST structure in the next meeting. Its rates are 8, 18 and 28 percent. If the proposal is passed, then all goods and services are currently taxed at 12 per cent, which will then come in the 18 per cent slab.
Highest tax on luxury products
At present there are four slabs of GST. 5 per cent, 12 per cent, 18 per cent and 28 per cent. Luxury products attract the highest tax. Luxury and sin goods attract the highest cess above the 28 per cent slab. This cess collection is used to compensate the revenue loss to the states after the introduction of GST.
Discounts may end on these products
In the next meeting of the GST Council, it can also be proposed to reduce the number of items which are exempted from GST. At present, unpacked, unbranded food and dairy items are exempted from GST.