New Delhi: The Goods and Services Tax (GST) Council is poised to make a crucial decision on simplifying the GST structure, with fewer tax slabs and lower rates, as the review process nears completion. Finance Minister Nirmala Sitharaman announced this during a recent post-Budget discussion, emphasizing the government’s commitment to rationalizing the tax system.
Currently, GST operates under a four-tier structure with tax slabs of 5%, 12%, 18%, and 28%. Essential items like packed food fall under the 5% bracket, while luxury and demerit goods are taxed at the highest rate of 28%. The Council, led by Sitharaman and comprising state finance ministers, has been working on streamlining the tax system for nearly three years. A Group of Ministers (GoM) was also formed to recommend changes to the existing structure.
Sitharaman highlighted that the review process has been thorough, with a focus on ensuring that the revised rates align with the needs of common citizens. “The original intent was to have fewer and lower rates. The work is almost complete, and I hope the GST Council will decide on it soon,” she stated.
This move comes on the heels of the Union Budget 2025-26, which introduced significant income tax relief for the middle class. Sitharaman reiterated that the government remains committed to strengthening the economy, dismissing claims of a structural slowdown. She also clarified that the tax relief measures were not influenced by political considerations, such as the upcoming Delhi assembly elections.
In addition to GST reforms, the Budget outlined a robust capital expenditure (capex) plan of ₹11.21 lakh crore for FY26, marking a 10% increase from the previous year. The fiscal deficit target for FY26 has been set at 4.4% of GDP, reflecting the government’s focus on fiscal prudence.
As the GST Council prepares to finalize its recommendations, taxpayers and businesses alike await a simpler, more efficient tax regime that could boost consumption and economic growth.
Source: Web Team, C6N
