GST Council to meet on Sept 3-4 to deliberate two-slab tax structure; rollout likely by Sept 22

The high-powered GST Council, chaired by Union Finance Minister Nirmala Sitharaman, will meet on September 3-4 to deliberate on moving to a two-slab Goods and Services Tax (GST) structure, replacing the current four-tier regime.

In an office memorandum, the GST Council Secretariat said the two-day meeting will be held in the national capital to consider recommendations of three Group of Ministers (GoMs) on rate rationalisation, compensation cess and tax treatment of health and life insurance.

The rollout of new GST tax slabs is likely around September 22, reported NDTV Profit, in time to coincide with the Navratri festival season.

Notifications are expected to be issued five to seven days after the Council’s decision. The reform proposal before the Council suggests collapsing the four-slab structure of 5%, 12%, 18% and 28% into two rates of 5% and 18%, classifying goods and services into ‘merit’ and ‘standard’ categories.

A special rate of 40% will continue on ultra-luxury cars and sin goods.

A six-member GoM chaired by state minister Choudhary had met last week and, in principle, endorsed the Centre’s proposal for a two-slab structure.

“We have supported the two proposals by the Government of India, of scrapping GST slabs of 12% and 28%,” Choudhary told reporters after the meeting, while adding that some states had raised observations which have been referred to the GST Council.

The panel also discussed a separate proposal to exempt GST on individual health and life insurance premiums, which are currently taxed at 18%.

Meanwhile, industry body Federation of Automobile Dealers Association (FADA) has written to the Finance, Commerce and Heavy Industries ministries seeking expedited implementation of GST rationalisation. It warned that customers are postponing car purchases in anticipation of rate cuts, which could turn festive season sales into a “whitewash” period if reforms are delayed.

The GST Council, comprising finance ministers of all states and Union Territories along with the Centre, is the apex decision-making body on indirect taxes.