New Delhi: Finance Minister Nirmala Sitharaman chaired a GST Council meeting on Wednesday, attended by finance ministers from various states, to deliberate on potential changes to goods and services tax (GST) rates. The meeting comes after Prime Minister Narendra Modi announced adjustments to the GST slabs during his Independence Day address at the Red Fort.
One of the key discussions focused on easing the tax burden on everyday items. Media reports indicate that shoes priced below Rs 2,500 and certain clothing items could see GST reduced to 5%, while more expensive shoes may continue to attract the current 18% rate. At present, all shoes above Rs 1,000 are taxed at 18%, and a revision could provide relief to ordinary consumers.
The council also examined measures to reduce the cost of cancer medicines. Of the 36 medicines under consideration, some currently carry a 5% GST, and officials are evaluating whether they should be exempt entirely, potentially lowering prices for patients.
Other consumer goods under review include small cars, televisions, refrigerators, air conditioners, toothpaste, and shampoo. Many of these products are currently taxed at rates of up to 28%, and proposals are being discussed to bring them under the 18% slab, although state governments would need to account for potential revenue losses.
Electric vehicle manufacturers are closely watching the meeting, which also debated a proposal to increase the GST on luxury electric vehicles costing over Rs 20 lakh from 5% to 18%. The recommendation has faced opposition from the industry.
The insurance sector is another area under review, with officials considering a potential reduction in GST rates. Reports suggest a consensus could be reached soon, with notifications of new rates possibly issued within the month.
The council also proposed introducing a system for filing automatic GST returns, a move aimed at simplifying compliance for businesses.
