Over 150 products may see rate cut in GST Council meet this week

The GST Council is expected to make a final decision during its two-day meeting this week regarding the Centre’s proposal to reduce GST rates on over 150 items as part of a comprehensive rate adjustment. 

The proposals to move various items from the 12% and 18% GST slabs to the 5% slab or to the nil GST category aim to reduce the tax burden for households and boost spending. GST council plans to overhaul the rate structure, replacing the current four-rate structure with a two-rate structure.

A significant part of the plan includes expanding the nil GST category by including commonly consumed food items like loose paneer, khakhra, pizza bread, chapati, and roti, which currently face GST rates of 5% to 18%, according to multiple reports.

Ready-to-eat foods such as paratha and parotta, currently taxed at 18%, are also considered for GST exemption. Items including butter, condensed milk, jams, nuts, namkeens, mushrooms, and dates may see a reduction in the tax rate from 12% to 5%.

The Centre has proposed reducing the GST on various confectionery, popular packaged snacks, breakfast items and dessert items from 18% to 5%. The items reportedly include cocoa chocolates, pastries, ice cream, and breakfast cereals such as cereal flakes, primarily used by urban consumers and younger demographics.

It is also expected to lower the tax on entry-level passenger vehicles and two-wheelers to 18%, making them more affordable ahead of Diwali. Currently, all passenger vehicles based on combustion engines are subject to a GST of 28% plus a compensation cess of 1% to 22% based on engine capacity, length, and body type.

The education sector is also set to benefit as items like maps, globes, pencil sharpeners, exercise books, graph books, and lab notebooks are proposed to have their GST reduced from 12% to zero. This may offer significant cost savings for students and parents, particularly before the new academic year.

Rate cuts will be presented to the GST Council, comprising Central and State representatives. The revised GST structure may be implemented by September 22 after approval.

(This story was taken from syndicated feed and was only edited for style by Gujarat Samachar Digital team)