The GST Council will soon take a decision on having fewer and lower rates as the review work is almost complete, said Finance Minister Nirmala Sitharaman in Mumbai on Tuesday.
Currently, Goods and Services Tax (GST) is a four-tier tax structure with slabs at 5, 12, 18 and 28 per cent. Luxury and demerit goods are taxed at the highest bracket of 28 per cent, while packed food and essential items are in the lowest 5 per cent slab.
The Group of Ministers (GoM) has been established under the council headed by Sitharaman, which includes her state counterparts. The group is expected to suggest a change in GST rates besides the reduction of slabs.
"To be fair to the GST and the ministers who are all in the council, the work on rationalizing and simplifying GST rates has already commenced. In fact, it had commenced nearly three years ago," she said at the India Today-Business Today Post Budget Round Table.
Sitharaman said later that the scope was widened and now the work is almost complete.
It was important, she said, not to let an opportunity slip away, as she told the ministers in the Council that they should see into the details of the rates since the rates "all appertain to everyday items consumed by the common people".
"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.
Days after the Union Budget 2025-26, which also provides substantial income tax relief to the middle class, minister asserted that economic fundamentals of the country are in good shape and there is no structural slowdown.
It is the reflection of the commitment the prime minister has towards the taxpayers, Sitharaman said while refuting speculations that the move was aimed at the Delhi assembly elections.
She told the gathering that there is no proposal to "shut down" the old tax regime.
As far as capital expenditure is concerned, the minister added here that the capex did not come down; in fact, it increased to Rs 11.21 lakh crore which is 4.3 per cent of the GDP.
For the capital expenditure, for fiscal 2025-26, the Budget said it would spend Rs 11.21 lakh crore, higher than Rs 10.18 lakh crore in the Revised Estimates for FY25. The figure was Rs 10 lakh crore for FY24, Rs 7.5 lakh crore for FY23, Rs 5.54 lakh crore for FY22 and Rs 4.39 lakh crore for FY21.
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 to 4.8 per cent of GDP.
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