Nirmala Sitharaman says GST Council to soon take decision on rates, number of slabs

Finance Minister Nirmala Sitharaman

Finance Minister Nirmala Sitharaman said on Tuesday that the GST Council will soon take a decision on having fewer and lower rates as the review work is almost complete.Goods and Services Tax (GST) is a four-tier tax structure with slabs at 5, 12, 18 and 28 per cent at present.

Nirmala Sitharaman said at the India Today-Business Today Post Budget Round Table,"To be fair to the GST and the ministers who are all in the council, the work on rationalizing and simplifying GST rates has already commenced. In fact, it had commenced nearly three years ago,” Sitharaman said later the scope was widened and now the work is almost complete. "For me, it was also important that we don’t lose an opportunity, that we can even bring down the number of rates, which is also the original intent that we wanted fewer rates and lower rates. So work has got to happen on that, and I hope the GST Council will decide on it soon,” Sitharaman said.

Mentioning that she told ministers in the Council to have a more in-depth look at the rates since they relate to everyday items consumed by common people, the minister said it was important to ensure that an opportunity was not lost.

Days after presenting the Union Budget 2025-26 that also provides significant income tax relief to the middle class, the minister asserted the country’s economic fundamentals are strong and there is no structural slowdown.

Tax relief in the Budget is a reflection of the prime minister’s commitment to the taxpayers, Sitharaman said and refuted speculations that the move was aimed at Delhi assembly elections. She also told the gathering that there is no proposal to ”shut down” the old tax regime.

At present luxury and demerit goods are taxed at the highest bracket of 28 per cent, while packed food and essential items are in the lowest 5 per cent slab. The GST Council, chaired by Sitharaman and comprising her state counterparts, has set up a group of ministers (GoM) to suggest changes in GST rates as well as reduce slabs.

*With PTI Inputs