Daijiworld Media Network – New Delhi

New Delhi, Aug 22: The 56th meeting of the Goods and Services Tax (GST) Council will be held in the national capital on September 3-4, with major reforms in the indirect tax regime expected to be on the agenda.

According to an office memorandum issued on Friday, the council is set to deliberate on the Group of Ministers’ (GoM) proposal to overhaul the existing four-slab GST structure and replace it with a simplified two-slab system of 5% and 18%. The GoM has also recommended an additional 40% levy for luxury and sin goods.

Samrat Choudhary, Bihar finance minister and head of the GoM, said, “The GoM on rate rationalisation has recommended a two-slab GST structure. We will be submitting our recommendations to the GST Council,” after concluding the panel’s two-day meeting on Thursday.

Sources revealed that the GoM agreed to scrap the 12% and 28% slabs, a move aligned with the Centre’s long-standing goal of streamlining GST. A senior official involved in the discussions said, “The objective is to move toward a simpler and more transparent GST regime while ensuring revenue protection for both Centre and states.”

India currently follows a four-tier GST system of 5%, 12%, 18% and 28%, with additional cess on luxury and sin items. The rationalisation is expected to cut down on classification disputes, simplify compliance and enhance efficiency in tax administration.

The ambitious reform, first announced by Prime Minister Narendra Modi in his Independence Day address, is expected to be rolled out by the upcoming Diwali festive season.