GST Council set to discuss reducing items in 12% slab
The agenda for the Goods and Services Tax (GST) Council at its next meeting will include deliberations on minimising the 12% tax slab and also finalising the tax treatment on service intermediaries, which could provide the sector relief worth thousands of crores, according to informed sources.
Further, while the meeting was initially supposed to be held in June, there has been some back-and-forth between members of the Council over the location of the meeting, leading to delays. It will now likely be held in July 2025, which would be more than six months after the last meeting, which was held in December 2024 in Jaisalmer.
According to the rules, the GST Council is meant to meet once every quarter, or three months.
“One of the main agenda items, as part of the overall simplification and rate rationalisation effort, is what to do with the 12% slab,” an official aware of the developments told The Hindu. “One of the internal recommendations was to minimise the slab or maybe even do away with it entirely.”
Doing away with the 12% rate would reduce the number of tax rates under GST to 0%, 5%, 18%, and 28%, not counting the specialised rates of 0.25% on diamonds and 3% on gold and silver, or the additional compensation cess on items in the 28% slab.
“It is improbable that the GST Council will completely abolish the 12% tax slab,” Saurabh Agarwal, Tax Partner at EY India, explained. “Instead, they are likely to gradually reduce the number of items in this category by shifting them to the 5% slab. Additionally, some items currently taxed at 18% may be moved to the 12% slab.”
