The current Goods and Services Tax framework consists of four tiers: 5, 12, 18 and 28 per cent. (AI image)

GST rate cuts coming soon! The Goods and Services Tax (GST) Council will meet for a two-day session starting September 3, as per the notice issued. The meeting comes within days of PM Narendra Modi announcing next-generation GST reforms and GST rate cuts in his Independence Day speech.“This Diwali, I am going to make it a double Diwali for you… Over the past eight years, we have undertaken a major reform in GST… We are bringing next-generation GST reforms. This will reduce the tax burden across the country,” PM Modi had said.The current Goods and Services Tax framework consists of four tiers: 5, 12, 18 and 28 per cent. Essential food products are subject to either nil or 5 per cent tax, whilst luxury and sin goods attract the highest rate of 28 per cent.For items in the 28 per cent category, particularly demerit and luxury goods such as automobiles, an additional cess is applied at varying rates.

GST rate cut: Two slabs of 5% & 18% in works

On Thursday, the state ministers’ Group of Ministers (GoM) on GST rate rationalisation had endorsed the Centre’s proposal to shift to a simplified structure with 5 and 18% slabs.Also Read | GST rates to come down drastically! 99% of items in 12% bracket may move to 5%; here’s how you will benefitThe panel’s convenor and Bihar Deputy Chief Minister Samrat Choudhary confirmed that the six-member ministerial group has also supported the elimination of the 12 and 28% tax brackets.“Both the proposals of the Centre have been accepted by the GoM on rate rationalisation,” Choudhary told journalists after the meeting concluded.According to Suresh Kumar Khanna, the Finance Minister of Uttar Pradesh, the Centre’s recommendation includes a provision for a 40% tax rate on items classified as ultra luxury and sin goods.Chandrima Bhattacharya, the Finance Minister of West Bengal, indicated that the state has suggested an additional levy above the 40% GST rate to sustain current tax levels on ultra luxury items and sin goods, including automobiles.She pointed out that the Centre’s recommendation lacked details regarding potential revenue reductions for both central and state governments following the implementation of revised GST brackets.Also Read | Big GST cheer for common man! Two-slab tax structure to replace 5-28% rates; Finance ministry shares important details