Under the GST, the highest 28-percent rated slab can be reconsidered. Apart from this, the idea of reducing tax rates on items that are commonly used can also be considered. Some important people within the government are supporting the action taken in this direction.
If this is done then the prices of many commodities will decrease, which has now increased due to higher GST. This may increase their demand. The Department of Industrial Policy and Promotion (DIPP) has advocated such a change in the industry, especially small enterprises, which are known to create more employment opportunities.
A senior government official said, ‘The 28% slab needs to be re-looked. Some items kept in that bracket make MSME (Micro, Small and Medium Enterprises) and they are under some pressure. ‘ 28% slabs have been kept in plastics furniture, nutritional drinks, auto parts, plywood, electrical fittings, cement, ceiling fans, and watches, besides consumer durables, automobiles and tobacco products.
On changing GST rates, the GST Council will have to stamp, which is the top decision-making body in this regard. The Council meeting is to be held in Guwahati on November 9-10. Then this matter can be discussed.
The top government officials gave signals of such a move earlier. This issue was raised in the discussion during the ET Awards ceremony on October 28 and Finance Minister Arun Jaitley had said, “The 28% slab rate is high, but it will remain for some time and then after that, we remove some things from 28% to 18% will be placed in slabs. Only luxury items will remain in high brackets.
Trade and industry entities have requested the government to remove some items from the top tax rate because the high bracket was for luxury and tobacco products.