GST Council Meet: 5% slab may be raised to 6% to boost collection

A GST (Goods and Service Tax) Council meeting is scheduled for mid-December wherein the GST Panel is likely to discuss on the many ways to boost revenue.

Among which one of the suggestion is to raise the 5 per cent tax slab to 6 per cent, as per a Business Standard report.

The 5 per cent tax slab includes household necessities such as edible oil, sugar, spices, tea, and coffee (except instant) are included. The tax slab also covers coal, sweets, life-saving drugs, basic clothing and footwear.

The Centre’s monthly GST collection target is about Rs 1.18 lakh crore. However, with rising the tax slab, it is expected to bring in additional revenue of Rs 1,000 crore per month.

“An idea that has emerged is increasing the 5 per cent slab to 6 per cent, which will mean 3 per cent GST each for the Centre and states. Some states are arguing that this will mean a 20 per cent increase in the tax rate. But in value terms it will not be much,” a government official told.

Increasing the compensation cess for cigarettes and aerated drinks is also one of the suggestion. The current cess on cigarettes ranges from 5 percent and an additional Rs 2,076 per 1,000 sticks of up to 65 mm to 5 percent plus and an additional Rs 3,668 for 1,000 sticks of up to 75 mm, said a report in Money Control.

The official stated that the auto sector is not currently being considered in this restructure.

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