Forthcoming 44th GST Council Meeting may take a call to Merge 2 Tax Slabs of12% & 18% in an attempt to simplify the issue related to classification of goods and to further ease the business process.

Union government appears to have accepted the proposal for for merging the goods and services tax(GST) slabs of 12% and 18% in the single slab. It was pursuant to the demand raised in  some states and endorsed in the 15th finance commission (FFC).

If the 12% and 18% slabs are merged to form a new slab somewhere in between, the two, it will impact the goods and services which is presently falling in the 12% slab whereas it will benefit all those items and dealers which is in 18% slab.

 Time will tell how industries,  businesses and consumers will respond to this rise.

This Rate rationalization will help reduce classification disputes, but the merging of 12% and 18% rate could lead to some exchequer and, hence, proper balancing is essential. The experts believes that the most commonly rate could be 14% to 15% so as to make it revenue neutral. As a sentiments booster, the Government may plan it at 14%.

Forthcoming GST Council meeting may be held virtually as earlier. There could be many more items for discussion on the agenda, but the major GST rate rejig will be the biggest game changer and key issue in the meeting..

Let us hold on  for the next GST council Meeting

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