The Group of Ministers (GoM) on GST rate rationalisation has agreed to scrap the 12% and 28% slabs, moving towards a simplified two-rate structure of 5% and 18%. The decision, taken at a key meeting on Thursday, could bring down prices for most goods and services.
According to the plan, 99% of items taxed at 12% will shift to the lower 5% slab, while nearly 90% of items currently in the 28% category will move to 18%. A higher 40% levy will continue on a limited set of goods, including tobacco and luxury items, with luxury cars also recommended for inclusion under the 40% bracket.
