New Delhi: The Central government is considering a major revamp of the Goods and Services Tax (GST) rate structure, with discussions underway to scrap the existing 12% and 28% slabs, according to official sources.
If implemented, the proposed model would leave only two main tax rates — 5% and 18% — aimed at simplifying the indirect tax system and reducing classification disputes. Sources in the government suggest that the move is part of a broader strategy to make GST more streamlined and taxpayer-friendly.
At present, GST is levied under multiple slabs — 5%, 12%, 18%, and 28% — with some items attracting additional cess. Officials familiar with the matter indicate that the proposal seeks to merge the 12% bracket with the 18% rate, while phasing out the highest 28% slab except for a limited set of luxury and sin goods.
“The objective is to bring more clarity for businesses, improve compliance, and make the tax structure less cumbersome,” a senior government official said, adding that the proposal is still at the consultation stage and will require approval from the GST Council.
Economists say such a move could simplify the taxation process but may have mixed impacts on prices — lowering the tax burden on some items while increasing it on others.
The proposal is expected to be taken up for discussion in the upcoming GST Council meeting, where states will also share their views before any final decision is made.
