Union Home Minister Amit Shah will lead talks with states and central ministries to build consensus on key changes to the Goods and Services Tax (GST) system, according to an Indian Express report.
Shah has already discussed the issue with Finance Ministry teams last week. The aim is to resolve contentious issues and push the long-pending proposal to scrap the 12% GST slab, the report said, citing sources.
The move could shift some goods to the 5% slab and others to the 18% slab. However, this change may cause an estimated annual revenue loss of ₹70,000–80,000 crore for the Centre and states combined, as per the report.
“This won’t be easy. No state will accept revenue losses without thorough discussions,” a source was quoted as saying in the Indian Express report.
The current GST regime, rolled out in 2017, has multiple slabs — 0%, 5%, 12%, 18% and 28% — plus cess for luxury and sin goods. Efforts to rationalise these rates have failed before due to lack of agreement within the GST Council.
Two Opposition states have also asked for the GST rate on life and health insurance to be cut from 18% to 5%. Other states want zero tax on premiums.
The GST Council has discussed rate rationalisation since 2021. In its 55th meeting in December 2024, the Council postponed a decision to cut GST on insurance premiums despite demands.
As per government data, the 12% slab contributes 5–6% of total GST collections. Most revenue — about 70–75% — comes from the 18% slab.
The report said any final decision on removing the 12% slab will require multiple Council meetings and states’ approval.
Source: CNBC TV18
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