GoM Meeting Soon on GST Reform Issue

18-Aug-2025 01:43 PM

New Delhi. In his speech on the occasion of Independence Day, the Prime Minister had said that Goods and Services Tax (GST) is an important tax reform and the country has benefited from it.

But there is a need to rationalize its rate. For this, a group of ministers has been announced which includes the Finance or Revenue Ministers of Bihar, Uttar Pradesh, Kerala, Rajasthan, West Bengal and Karnataka. A meeting of this group of ministers is going to be held soon to discuss the proposed GST.

It is understood that the proposed GST reform was discussed with these ministers before the Prime Minister's address.

With the vision of building a self-reliant India, the Central Government has planned GST reform on three pillars (bases) which include structural changes, uniformity in rates and making living easier.

An internal analysis of the Department of Revenue, under the Union Finance Ministry, has said that under the proposed two-slab structure of 5% and 18%, gross GST revenue will remain high at least up to the current collection level. Most goods and services are likely to be included under these two tax slabs.

For example, goods used by the common man and important inputs for farmers or goods required by small entrepreneurs and MSMEs will be GSTd at the rate of 5%.

This will not only reduce the tax burden on them but will also encourage consumption, thereby boosting production. Most of the remaining goods and services may be GSTd at the rate of 18%.

At present, the GST structure has tax slabs of 5%, 12%, 18% and 28%. Along with this, compensation cess ranging from 1% to 2.90% is also applicable.

This high cess is levied on certain specific products - cars, refrigerators, air conditioners, pan masala, tobacco and cigarettes etc. It seems that the 12 percent tax slab may be abolished and a special GST rate of 40 percent may be introduced.