GoM favours Centre's GST rejig, opposition states want to see maths
GST
Dated:- 21-8-2025
PTI
New Delhi, Aug 21 (PTI) A panel of ministers from different states on Thursday in principle approved the Centre's proposed sweeping GST reforms through rate cuts, but some opposition-ruled states wanted to know the revenue loss from the move and how that would be bridged.
The Group of Ministers, headed by Bihar Deputy Chief Minister Samrat Choudhary, discussed the Centre's proposal of reducing the number of slabs under the Goods and Services Tax (GST) to 2 (5 and 18 per cent) from 4 (5, 12, 18, and 28 per cent). The Centre has also proposed a 40 per cent rate for 5-7 select goods.
While the GoM was in favour of rate and slab rejig if
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adesh Finance Minister Suresh Kumar Khanna said all states welcomed the Centre's proposal, saying it is in the interest of the common man. Ultra-luxury goods, including ultra-luxury cars, and sin goods will fall in the 40 per cent tax bracket.
“Some states demand that states should be compensated for revenue loss upon implementation of the new rate structure. The revenue loss will be calculated,” Khanna said.
West Bengal Finance Minister Chandrima Bhattacharya said the Centre's proposal presented before the GoM on rate rationalisation did not include the revenue loss that is going to accrue on account of rate and slab changes.
“We have said we are okay with any rate rationalisation proposal, which is pro-people, but we should also know w
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rationalisation must be balanced by ensuring that the revenues of the states are protected. Otherwise, the welfare schemes meant for poor people, the middle class and infrastructure projects will suffer.
Telangana supports the proposed rate rationalisation as a part of GST reforms, but with a proper compensation mechanism, an official statement issued by the state government said.
The Telangana minister suggested that either the current compensation cess mechanism be continued, or alternatively, the GST rates on sin or luxury goods may be increased to their present levels, and the additional amount so collected may be given to the states.
On Wednesday, a GoM on insurance discussed the Centre's proposal to exempt GST on health and life in
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