The GST council has announced the reduction of tax slabs to two at 5% and 18%, Finance Minister Nirmala Sitharaman announced. The revised GST structure will come into effect from September 22.
The 56th meeting of the GST Council, chaired by Finance Minister Nirmala Sitharaman on Wednesday, approved a major rationalisation of GST rates, scrapping the existing 12 per cent and 28 per cent slabs.
New GST slabs announced
The Council cleared a simplified two-rate structure of 5 per cent and 18 per cent, while introducing a new 40 per cent slab for sin and luxury goods. The changes will take effect from September 22, Sitharaman announced after the marathon meeting.
Sitharaman said all states had agreed to the rate rationalisation, calling it a consensus-driven decision. West Bengal Finance Minister Chandrima Bhattacharya estimated the total revenue loss from the move at Rs 47,700 crore.
Uttar Pradesh Finance Minister Suresh Khanna noted that no final decision had been made on the tax incidence for demerit goods, adding that any levy beyond the 40 per cent rate would be decided later.
The 56th meeting of the GST Council stretched for 10.5 hours, with the Centre and states negotiating key tax proposals in detail.