FM Sitharaman to address GST slab deadlock in April

Union Finance Minister Nirmala Sitharaman is set to meet a Group of Ministers (GoM) to address ongoing disagreements about the 12% Goods and Services Tax (GST) slab. The Centre wants to remove this tax slab to simplify the GST structure, but several state ministers are opposed. Sitharaman will meet with the GoM after the Budget session in April. The GoM includes ministers from Bihar, Uttar Pradesh, Rajasthan, Karnataka, West Bengal, and Kerala. The aim is to resolve differences and reach a consensus, as many states fear removing the slab may hurt their revenue. Currently, the 12% slab represents only 5% of India's total GST revenue, the least among the main tax slabs. In contrast, the 18% slab brings in 73%, while the 28% slab contributes 12.5%. The 5% slab generates 8% of the overall revenue. Since the GST's implementation in July 2017, it has been crucial for government revenue. The Centre proposes a three-rate system with only 5%, 18%, and 28% slabs should the 12% slab be eliminated. However, this plan has faced resistance from state governments. Some ministers argue that the removal could negatively impact specific industries. After recent income tax cuts in the budget, the government is now focusing on GST reforms to enhance consumer spending and mitigate tax disputes. Economists believe lowering indirect taxes like GST may be a better way to stimulate demand and support economic growth.