Its next meeting will include discussions in the area of thousands of crores of rupees, according to informed sources, which will include a consultation in the field of thousands of crores of rupees, according to informed formulas, to reduce tax treatment on the 12% tax slab in the agenda for the Goods and Services Tax (GST) Council.
In addition, while the meeting was to be held in June, there was some back and forth among the members of the council at the place of the meeting, which delayed. It will now be held in July 2025, which will be held more than six months after the previous meeting, which was held in December 2024 in Jaisalmer.
According to the rules, the GST Council means every quarter to meet once, or for three months.
An official awareness about development Hindu“One of the internal recommendations was to minimize the slab or perhaps to remove it completely with it.”
With a rate of 12%, the number of tax rates under GST will be reduced by 0%, 5%, 18%, and 28%, special rates on diamonds and 3% on gold and silver, or 28% slab will not count additional compensation on diamonds.
Saurabh Aggarwal, tax partner of EY India, said, “It is impossible that the GST Council will completely eliminate 12% tax slab.” “Instead, they gradually are likely to reduce the number of items in this category, by transferring them to 5% slab. Also, some of the taxes currently taxed at 18% can be moved to 12% slab.”
This adjustment reflects changes in consumer behavior, he said, many products that were once considered discretionary, such as toothpastes and soaps, have become everyday requirements since the increase in per capita income. Currently, toothpastes and soaps are taxed at 18% and shampoo can be taxed up to 28%.
Input tax loan
However, other tax experts say that moving up to 5% from 12% slab cannot always be a good thing for manufacturers. At 12%, they are eligible for input tax credit, which will probably be canceled when carrying up to 5%. This means that manufacturers will not get credit for tax they pay on input.
Hindu It has been learned that other major commodities will be taxed on the agenda of GST Council. Currently, service mediators are taxed at 18%, when they provide services to companies abroad. It is likely to be removed.
A rapid general phenomenon, especially in IT space, is for the Indian hand of a multinational company to execute an order for MNC within India. For example.
Manoj Mishra, a partner and tax control management leader at Grant Thornton Bharat, said, “The current framework continues to continue the tax intermediate services even when providing to foreign customers, which leads to a double whami.” “First, it increases the cost for Indian service providers, and second, it results in dual taxation as Indian importers are paid duty at full value, in which the intermediary is paid.
According to Mr. Mishra, the tax risk from these service middlemen is about 3,500 crores, making the issue very important for the industry.
Given that these services bring valuable foreign currency, it is expected to behave as a zero-rated supply, “he said.” Such treatment will not only help reduce tax burden and compliance uncertainty, but will also be in line with the approach taken by the courts. ,
Published – 26 June, 2025 01:37 AM IST
