GST Council Likely to Remove 12% Tax Slab to Move Items to 5% and 18%
As per reports, the GST Council is expected to revise the Goods and Services Tax rates. The council may cut the rates from four to three by removing the 12% tax slab. Currently, there are four tax slabs under the GST Regime. These are 5%, 12%, 18%, 28%.
Officials and experts who are suggesting the Group of Ministers (GoM) with GST rate changes have almost agreed that the 12% tax slab is no longer useful. The items that are currently categorised under the 12% slab can be moved either to the 5% or the 18% tax slab. The suggestion of eliminating the 12% tax slab has been approved by most Union and state government officials, experts and GoM representatives.
Goods that are taxed under 12% tax slabs include condensed milk, caviar and caviar substitutes prepared from fish eggs, drinking water packed in 20 litre bottles, walkie talkies, tanks and other armoured fighting vehicles, contact lenses, cheese, dates and dried fruits, frozen vegetables, sausages and similar meat products, pasta, jams and jellies, fruit juice-based drinks, namkeens including bhujiya, curry paste, mayonnaise, tooth powder, feeding bottles, carpets, umbrellas, caps, bicycles, specific household utensils, furniture made of cane or wood, pencils and crayons, handbags and shopping bags made of jute or cotton, footwear priced lower than Rs. 1,000, diagnostic kits, and marble and granite blocks.
On the other hand, the services that are taxed at 12% include technical and business services, hotel rooms up to Rs. 7,500 per day, specified construction work, transport of passengers by air in non-economy classes, a few types of multimodal transportation, and some professional services.
The last GST Council meeting was held in December 2025. Since then, there has not been any meeting. However, the council may schedule a meeting in June or July to decide on rate rationalisation.
The Group of Ministers (GoM) on GST rate rationalisation was set up on September 24, 2021, after a decision made at the 45th GST Council meeting held in Lucknow. The first convenor of the group was former Karnataka Chief Minister Basavaraj S Bommai. Later, in November 2023, Uttar Pradesh Finance Minister Suresh Kumar Khanna became the convener. Then, on February 27, 2024, Bihar Deputy Chief Minister Samrat Chaudhary became the new convener.
