NEW DELHI: The number of items in the 28 per cent GST tax bracket is set to come down as the government is planning to prune the list of items under the highest slab rate after GST revenues match with collections in the previous tax regime.
Finance minister Arun Jaitley feels some of the items placed under the 28 per cent slab deserve to be in lower slabs. “We have been gradually bringing them down. The whole idea is, as your revenue collections neutralise, we must prune it and that’s the pattern in which the GST Council has so far been functioning. I see that as a future guide as far as the Council is concerned,” Jaitley said at an event here on Tuesday.
Under GST, most goods and services have been bracketed in the five, 12, 18 and 28 per cent categories. The rates were based on the principle of keeping the total tax incidence at almost the same level before the new indirect tax regime kicked in as also keeping revenue collections neutral.
In its past 3-4 meetings, the GST Council has slashed rates on over 100 items, bringing them down either from 28 per cent to 18 per cent or from 18 per cent to 12 per cent.
The Council, in its next meeting on November 10, is expected to consider lowering of tax rates on a host of goods such as hand-made furniture, plastic products and daily use items like shampoo.
Last month, the Council had approved an ‘approach paper’ to be followed by the fitment committee while deciding on future rate revisions.
The new indirect regime has subsumed over a dozen central and state levies including excise duty, service tax and value-added tax.