GST Council To Decide On Lower Rates, Slabs Soon, Says Sitharaman

The Goods and Services Tax (GST) Council will soon decide on having fewer and lower rates, since the review work is nearly over, Union Minister of Finance Nirmala Sitharaman said on February 4, 2024. 

At present, the GST has a four-tier tax structure with slabs of 5, 12, 18, and 28 per cent. Luxury and depreciating products are taxed at the highest rate of 28 per cent, while packaged food and necessities are taxed at the lowest rate of 5 per cent. 

The GST Council is led by Sitharaman and includes her state equivalents as members. It also has a group of ministers (GoM) body to propose adjustments to GST rates and slab reductions. 
 

“To be fair to the GST and the ministers that comprise the council, work on rationalising and streamlining GST rates has already begun. In reality, it began about three years ago,” she said at the India Today-Business Today Post Budget Roundtable. 
 

She added that the scope was later expanded, and that job is now nearly complete. 
 

She further said that she had advised ministers in the GST Council to take a closer look at the rates since they relate to everyday things used by ordinary people, and that it was critical that an opportunity not be missed. 

“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. 

Sitharaman had presented the Union budget for FY 25-26 on February 1, 2025, which includes significant income tax relief for the middle class. She has also refuted speculations that the move was aimed at Delhi assembly elections and said that there is no proposal to “shut down” the old tax regime.  

The capex for capital expenditure has increased to Rs 11.21 lakh crore, representing 4.3 per cent of the gross domestic product (GDP). The Budget has also proposed spending Rs 11.21 lakh crore towards capital expenditure, higher than the revised estimate of Rs 10.18 lakh crore for FY25. The Budget pegged a fiscal deficit of 4.4 per cent of GDP for FY26 and lowered the target for FY25 by 10 basis points (bps).