New Delhi: A panel of officials on ways to augment Goods and Services Tax (GST) revenue has suggested two GST slabs of 10 per cent and 20 per cent and the transfer of some goods from the 18 per cent slab back to the highest 28 per cent category.
The GST council has fixed over 1,300 goods and 500 services under four GST slabs of 5, 12, 18 and 28 per cent. This is besides the tax on gold which is at 3 per cent and rough, semi-precious and precious stones that attract a special rate of 0.25 per cent under GST.
The panel has made a presentation to the Bihar Deputy Chief Minister Sushil Modi who is heading the panel on GST revenue augmentation.
The recommendations could be discussed at the next GST Council meeting provided they make to the agenda, which has to be approved by all the states.
In its presentation, the committee alerted that there could be a shortfall of Rs 63,200 crore in GST collections in the current financial year and a deficit of as much as Rs 2 lakh crore by 2021.
Citing the suggestions made by the officials’ panel, informed sources here said that its recommendations on increasing the GST revenue include moving items from 5 per cent and 12 per cent tax slabs to higher ones like 18 per cent, such as moving mobile phones from 12 to 18 per cent and precious metals from 3 to 5 per cent.
The panel also called for revising rates on certain items which were earlier taken higher to 18 per cent, and withdrawal of exemption for certain items.
The GST Council had cut rates on a number of consumer durables and paints to 18 per cent from 28 per cent in July 2018 in a bid to lower prices and boost consumption.
Modi, who is the Bihar Finance Minister and head of the Group of Ministers (GoM) on Integrated GST (IGST), had ruled out the possibility of changes to the rate structure at a time when exchequer revenues have moderated owing to the economic slowdown.