GST Council begins work to rejig tax rates; opposition states seek revenue protection
GST
Dated:- 3-9-2025
PTI
New Delhi, Sep 3 (PTI) The work to overhaul the tangled goods and services tax (GST) began on Wednesday as the government looks to cut the tax rate on common-use items, ranging from butter to certain footwear and apparel, in an attempt to boost domestic spending and cushion the economic blow of US tariffs.
The marathon 56th meeting of the GST Council, the apex decision-making body on indirect taxes, headed by Union Finance Minister Nirmala Sitharaman and comprising representatives of all states, discussed reducing GST on life and health insurance premiums and easing compliance rules for business on the first day of the two-day meeting.
According to sources, the panel is likely to have discussed a three-way registration process for non-risky business and issuance of refunds, in case of exports, in seven days, among a host of measures to ease compliance burden.
It
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el priced up to Rs 1,000 are taxed at 5 per cent.
Beyond the threshold, 12 per cent Goods and Services Tax (GST) is levied.
The 56th GST Council decided to raise the threshold for footwear and apparel in the 5 per cent slab to Rs 2,500 apiece from Rs 1,000.
Consumer goods, such as tooth powder, feeding bottles, tableware, kitchenware, umbrellas, utensils, bicycles, bamboo furniture and combs, may see tax rate cut from 12 per cent to 5 per cent.
Similarly, the tax rate on shampoo, talcum powder, toothpaste, toothbrushes, face powder, soap and hair oil is likely to come down from 18 per cent to 5 per cent.
Cement is likely to cost less, with the tax rate coming down from 28 per cent to 18 per cent.
Reducing GST on Petrol, LPG and CNG vehicles of less than 1,200 cc and not more than 4,000 mm length and diesel vehicles of up to 1,500 cc and 4,000 mm length to an 18 per cent rate from 28 per cent is being discussed by the council.
Discussions are also ongoing on cutting taxes on Moto
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ond year of their implementation, effectively neutralising the full impact of the US tariff, economists said.
While opposition-ruled states have demanded that all states be compensated for the revenue loss they incur post the implementation of the GST rejig, the finance minister of TDP-ruled Andhra Pradesh, Payyavula Keshav, said his state is supporting the Centre's GST rate proposals.
On Wednesday morning, before the Council meeting, eight opposition-ruled states Himachal Pradesh, Jharkhand, Karnataka, Kerala, Punjab, Tamil Nadu, Telangana and West Bengal had their own meeting to formalise their strategy and reaffirmed their demand for revenue protection to give approval to the rate rejig.
Jharkhand Finance Minister Radha Krishna Kishore told reporters here that his state will suffer a Rs 2,000 crore revenue loss if the Centre's GST rate reform proposal is implemented.
“If the Centre agrees to compensate us for whatever loss we would incur, then we have no issues in approving th
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